We understand that many business owners are dealing with the financial impact of the latest disruption caused by the coronavirus. We have had the opportunity to speak to many commercial bankers and lenders on behalf of our clients and most lenders are developing solutions to work with their customers through these difficult times. Here’s what we’re seeing.

Solutions offered by banks and lenders

First and foremost, we have found that all situations are different and that lenders are looking at the business on a case by case basis to determine how best to solve the problem. The most important comment that all have provided is to maintain an open line of communication.

Hopefully everyone has maintained a positive relationship with their relationship manager and is in a good position to have the conversation.

If your business has been closed as result of recent events, you should call your banker immediately. Many of them will work with you through the period your business is impacted. If you are still operating, but impacted by the overall economic conditions there are some steps you should take before making the call. Fortunately, many of these are also necessary to explore the multitude of relief packages that might be available for your business. As a general rule, developing these skills will help make you a stronger business..

• To the best of your ability, quantify the financial impact the disruption in business has had on your business.
• Quantify the steps taken to mitigate the impact.
• What actions are you taking to secure the long term health and viability of the business?
• Remember a short time ago, finding quality talent was hampering your ability to grow and meet your goals? Are you taking steps to protect your workforce and making an investment in the future?
• Evaluate and quantify what programs might be available to obtain relief funds.
• Prepare a budget and cash flow forecast to determine your business’ short term and long term needs.
• Analyze your supply chain and understand what steps can be taken to solidify the long term health of your business.
• Assess your customer health and revisit credit policies to evaluate your ability to collect accounts receivable and future cash flow impacts.
• Revisit your overall business plan and strategy.

Most important, this analysis is important but must be accomplished quickly to be able to communicate with your banker before you miss a payment or a covenant.

Most banks are still lending but the underwriting process may be different and the situation is fluid and once again different depending on the need and business situation.

While details are still emerging, the current Coronavirus Aid, Relief, and Economic Security) Act (Senate Amendment to H.R. 748 contains numerous tax, grant, and loan provisions designed to provide financial aid to individuals, businesses, nonprofits and state and local governments. Such provisions include over $454 billion for loans, loan guarantees and other investments in support of the Federal Reserve’s lending facilities to eligible businesses, states and municipalities. (Sec. 4003) as well as SBA loan forgiveness programs for eligible businesses. As these details continue to emerge, start preparing to have conversations with your lending officer about these relief efforts.

If you need assistance with any of these items you can reach out to us.

We have CFO resources available who have the experience and can help. Visit our coronavirus resource center for more helpful information.