In the midst of a global pandemic and with the passing of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), businesses are dealing with mounds of uncertainty. Business owners are asking what they can and should be doing to protect themselves and take advantage of available relief. Below we share our advice and guidance we suggest businesses consider taking during this time.
Communicate with Your Advisors
Make sure you’re in touch with your top advisors throughout this stressful time so evolving legislation can be considered, and actions can be taken as needed. Communicating with your banker, CPA, lawyer and any other trusted business advisors will be critical to making strategic moves to help your business.
Be Ready to Apply for Loan Assistance
The Small Business Administration (SBA) has not yet published guidance for businesses to apply for loans or relief within the CARES Act, but it’s important to be ready for when they open enrollment. Be in close communication with your banker, and compile documents typically needed for a loan application, such as:
- Last three years of federal tax returns
- Interim 2020 and full year 2019 income statement and balance sheet
- 2019 payroll information
- Organizational bylaws, articles and operating agreements
- General liability insurance information
- Current building lease and any amendments
Consider Cash Flow Adjustments
Cash flow is a concern to most businesses during this time. Here are a few considerations that could help:
- Many banks are allowing loan payment deferrals during this time. Consider requesting loan payment deferrals from your lender on current loans if needed.
- Now is the time to review your Line of Credit maturity date and initiate the renewal process if it’s coming soon.
- Prioritize payments using a new mindset due to the state of the economy and the recent stimulus bill, layoffs, furloughs, and other financial impacts.
Submit Your 2019 Tax Filings
Even though the IRS extended the federal tax filing and payment deadline and certain states are also extending, it’s important to get your documents to your accountant as soon as possible. Having your taxes filed by the original deadline will give you peace of mind and these tax filings could be required for SBA loans.
Stay Protected from Scammers
With growing financial concerns, unfortunately financial scams are also on the rise. Remember that the IRS does not call anyone. Do not fall for any scammers asking for bank information to direct deposit your economic impact payments. Learn how to protect yourself from tax-related identity theft.
Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential business implications. Visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times. Please keep in mind that due to the quickly-changing nature of the COVID-19 pandemic, you should always discuss changes with your Anders advisor, banker or legal counsel.
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