Using a Commercial Loan Broker for Your Small Business in Tough Times

Economies are constantly going through phases. Bubbles burst, policies change and natural disasters strike, but the laws of supply and demand never change. Different situations make adaptation necessary, the current pandemic being the most relevant example, but as long as you remain calm and pay attention to economic trends, you should be safe.  
 
The coronavirus has not only put many lives at risk, but small businesses all around the world are experiencing the strain as one by one, stores shut their doors. There’s no sugar coating it: The situation that our country and the rest of the world faces is dire. However, even in the most critical times, opportunities are all around us. Case in point, in an effort to lower the cost of borrowing and to keep credit flowing to the workers, the Federal Reserve recently slashed its interest rates to next to nothing.  
 
If you own a business and are losing sales due to the quarantine, or have had to temporarily close altogether, emergency loans may be a necessary part of regaining a new normal after the sudden and necessary response of the past few months. Of course, even with the recent efforts by policymakers to make the process of obtaining a loan easier, there will always be risks. Here are some ways to find a trustworthy broker, how to make your loan work for you and other tips for keeping yourself and your employees financially secure in these difficult times.      

Finding a Trustworthy Broker: 

Read Independent Review Sites 

Independent review sites are popular for obvious reasons: the reviews are written by customers only, meaning the broker firm cannot influence what is being written about them. If they have mistreated their customers in the past, you are sure to read about it there. From the BBB to Google Reviews, there are numerous ways to check on a loan broker prior to initiating a call. 

Approach the Broker Directly 

After checking out their website and reading reviews, one of your greatest resources is your own intuition. If the broker you are considering is speaking in vague terms, avoiding your questions and trying to fast-talk you into doing what they want, listen to that little voice inside your head that is telling you that this is not a good fit. Since the broker’s office will probably be closed for at least the next month due to continued COVID-19 precautions, and you will have to speak over the phone or screen share, you may lose the in-person advantage of watching their body language. However, there will still be clear indicators if the firm is not legitimate.  

Considerations When Taking out a Loan: 

How Much Money do You Need, and How Much do You Need the Money? 
Before you take out a loan, think about how much you actually need the money. Just because there is a crisis does not mean you have no other options. Does your business work in perishable goods or durable goods? Is your business in manufacturing or information? Can your employees work from home or not? Do you have enough capital to survive? The coronavirus is a single threat, but it affects every business in different ways. Consider, not just current cash, but your estimates for the next three to six months. What is your plan to regain consistent cash flow? Apply funds in the right proportion directly to those activities in order to avoid spending on hope instead of real opportunity. 

What Will you be Able to Pay Back? 

Since ancient times, loans were intended to be repaid with interest. Although recent FED decisions have drastically reduced these interest rates, loans still need to be paid back, and for some companies, that might not be possible. After all, the Small Business Administration’s statistics say that roughly half of all small businesses survive only five years, with or without a national catastrophe, and a small loan might not be able to handle your liabilities. 

What Small Businesses can do to Survive the Coronavirus:  

Furlough Your Workers 

Furloughing employees, even if it is only temporary, is difficult for any business owner. But, it may be for the best if you want them to have jobs to come back to. Laz-Y-Boy just furloughed 6,800 employees, while Cheesecake Factory furloughed about 41,000. 

Have Your Employees Work From Home

If your employees can work from home, even in a minimal way, it is better than nothing. Providing at least a few of the services your company offers shows the public that you are devoted to your workers and customers. See if you can come up with creative ways to continue business during a quarantine to prove that your business is scrappy and innovative.  

Apply for Federal Aid 

There are a number of programs set up for exactly this situation, and now is the time to take advantage of them. One proposal, the “Small Business Workforce Stabilization Fund,” if accepted, would forgive financial aid offered to businesses that were solvent before the crisis, as long as all the employees are rehired within a twelve month period. Other similar proposals and programs are out there, so see if any are right for you.   

Speak With Policymakers 

Local and state officials cannot help you with your specific needs if you do not talk to them, so get in touch with the ones who control public policy and let them know how the coronavirus is impacting you. 
 
Nobody knows how much damage the coronavirus will ultimately do, or how the market will react. Experts are making predictions, but even they are in the dark. What we do know is that if you own a business, you perform a great service to your community, and you need to do everything you can to stay afloat, for yourself and others. So, pay attention to the market, get help if you need it and most importantly, stay safe.    

Talk With Us About Your Loan Application 

If you are applying for a loan talk with your loan broker. We will shop competitive rates and help you get your loan funded so you can get back on the track toward your future. Give us a call and speak with a loan broker today. 

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