On Monday, the U.S. Small Business Administration made a plea to its participating 7(a) lenders and Certified Development: Give borrowers with small business loans an opportunity to remain solvent. And that means being flexible with terms. Here’s more on what the SBA is asking lenders to do in economic turmoil.
3-month Payment Deferments: Is It Enough?
The SBA is calling for a three-month deferment of loan payments to help free up capital needed to run businesses. The downside is that three months is a short time frame in which to work. The pending recession is already several months along, with no end in sight. So what about borrowers that need more than a three-month curtain? Says the SBA: ’If a deferment longer than three consecutive monthly payments is needed for a loan, borrowers can work directly with their lenders who in turn will work closely with the SBA to identify the best solution.’
Personal Credit, Falling Equity, and Other Factors of Concern
Other considerations highlighted by the SBAs announcement include lowered personal credit scores, plummeting real estate values, and similar economic indicators assured to be askew in a volatile market. Borrowers affected by these factors should be examined individually for the best course of action. But the question remains: In such a tumultuous market, does a best course of action truly exist?
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Interesting post. I want to run a business soon, so I'll keep this post in mind. Becoming, what I hope, an entrepreneur is somewhat new to me, so I can use all the help and advice I can get! I know it'll be tough. Lately I've been thinking about the idea of buying a business instead of starting from scratch. I'm not sure what I should go for. Franchise? Home-based? I don't know. Do you have any suggestions or advice? Thanks!
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