01 Apr Do This To Avoid SBA Loan Default
SBA loans are a great way to expand, finance your business, or fund major expenses without affecting your cash flow. But, when borrowers fail to meet their payment obligations, it can affect their borrowing reputation. This is the worst nightmare for any business owner.
Recently, loan defaults have risen due to economic uncertainties and high interest rates. If you have been here before, you understand how frustrating it can be. But what if I told you there is a way you can navigate during these financially challenging times and save your business from any serious financial consequences?
Here are the tips to avoid SBA Delinquencies:
1. Monitor Cashflow
Reviewing your cashflows frequently and setting up a budget can help you determine your business performance and predict future revenue. Narrow down your expenses and remove all non-essential spending. Always keep your business and personal finances separate.
2. Automate your Payments
Automating your payments or setting reminders helps prevent missed deadlines. Set up reminders one month or two weeks before the deadline to help you prepare for the payments.You can also set up weekly reminders to avoid getting caught up.
3. Have Emergency Funding
Every business needs an emergency fund to cater for emergencies when the company is not doing well. It’s always advisable for businesses to have emergency savings to cover their loans for three to six months if the business doesn’t perform well.
4. Inform Your Lender
Do not sit until you default your payments. Get in touch with your lender and request debt restructuring or hardship options.
5. Explore SBA Default Programs
Check out SBA default programs and debt relief options. Work with your lender to help you navigate through this.
6. Consider Debt Financing
Explore debt refinancing options for emergency funding.
Avoiding SBA delinquencies requires proper planning, financial discipline, and timely communication with your lender. Do not wait until you fall behind on payments. If you need help with SBA loans, Countrywide Financial Solutions is a trusted financial service company by SBA lenders. Talk to us today
