Credit unions across Wisconsin are hard at work helping their business members weather the COVID-19 pandemic. What should entrepreneurs, small businesses and employers do at this time? Consider these steps:
- Talk to your credit union business lender. The federal regulator for credit unions has urged them to work with borrowers who are struggling to make payments because of this crisis. Credit unions may be able to modify loan terms, waive fees, defer payments or take other steps to help.
- Don’t panic. Avoid rushing to draw on lines of credit for working capital. They may come with fees and costs you’d rather avoid unless necessary. The money will be there if & when you need it. Credit unions have plenty of “liquidity” – funds available to pay depositors and make loans.
- Get ready for new loan options. New SBA “Paycheck Protection Program loans” can help employers during the crisis. The loans are 100% federally guaranteed. If employers maintain their payroll, the loans are forgiven, helping workers stay employed and helping businesses and the economy recover faster after the crisis. It will take time for that program to get up and running. In the meantime, businesses should start assembling documents to expedite the application process, including:
- SBA Form 1919
- Articles of incorporation/organization
- Bylaws/operating agreement
- Trailing 12-month profit and loss statement
- Payroll expense verification documents, including IRS forms 941 and 944, payroll summary reports and bank statements, summary of payroll benefits
- Mortgage or rent statements
- Utility statements
The U.S. Chamber of Commerce offers a guide and checklist.
The SBA also has information on its Economic Injury Disaster Loans program (which provides working capital of up to $2 million to small businesses) and the SBA’s debt relief program (which pays interest and principal on new or existing SBA 7(a) loans.)
- Stay calm. Pandemic news changes day-by-day--sometimes by the hour. No one can say right now how long the crisis will last, or what tomorrow will bring, but your credit union is ready to do all that it can to help you get through it.