Banking guidance during COVID-19 crisis

During a time of unknowns, both banks and businesses are having to adjust their strategies and approaches to financial matters to accommodate for the drastic and unexpected disruptions to daily operations. Below are a few recommendations for both banks and businesses on navigating client/financial institution relationships during this time:

How can Banks Help Their Clients?

*Note: Each client situation will be different and needs to be evaluated individually. Options may include:

• Approving out of formula borrowing temporarily
  
• Increasing lines of credit
• Deferring principal payments
• Deferring P&I for 90 days
• Waive certain fees
• For existing SBA Loans: If a bank has ‘Preferred Lender’ status, they have the authority to unilaterally defer either principal or principal and interest for up to 6 months if the loan has NOT been sold, or up to 3 months if it HAS been sold.

What should businesses do to prepare for a discussion with your bank?

• Attempt to identify the impact of COVID-19 on your cash flow for the next 90-180 days as best you can.
  
• Communicate openly and often. Call your banker to talk about concerns.
• Be proactive – do not wait to default your loan before having discussions.
• Come with solutions. Identify what YOU are doing to help solve the issue, and be ready to ask the bank for their ideas too.
• Your bank wants to help; but they will be much more supportive if they believe it’s a partnership in finding a solution.