Business Options for Financial Relief: Modifying or Postponing Payments
What is it?
Many landlords, auto loan, and insurance companies are able to provide financial assistance in the form of delayed payments for customers impacted by coronavirus by offering a deferment or a forbearance.
To avoid defaulting on payments, a due-date change, deferment or forbearance will delay payments if a customer can sufficiently demonstrate a temporary inability to pay to their Creditor. In some instances a deferment can be interest-free.
Is my business eligible for this?
Creditors may provide financial relief to their customers on a case-by-case basis depending on the company, the service or product they provide, or by what their funding partners allow.
If you don’t expect your financial situation to improve, consider enrolling in an income-driven repayment plan instead of pausing repayment, such as a loan modification. If you have already missed some payments or are behind, to avoid default, some programs can be applied retroactively.
Please note that private student loans and most companies are not legally required to provide financial assistance. Banks or Lenders may have requirements around making such changes; however, during this unforeseen economic time, flexibility and availability of programs are prevalent.
If possible, consult with your financial advisor or do your homework, as some options are more beneficial than others, e.g., deferments are sometimes interest free for certain types of loans vs. forbearances where interest may still accrue.
How do I apply for hardship assistance?
Reach out to the landlord for your office space, the auto-loan providers for company vehicles, and insurance providers for your company to see if they have options such as payment deferment options or other financial assistance in a hardship.
If possible, come prepared with information and supporting documents around your temporary inability to pay and have patience with customer service reps and communicating in advance of defaulting on a payment can help increase your chances of receiving assistance.
If you’ve had to give your employees pay cuts, encourage them to reach out to their personal loan providers so they can access potential payment relief as well.
*Please note this information is for informational purposes only and is current as of April 7, 2020 based on our understanding of these programs. It can and likely will change — therefore please visit the source directly for the most updated and accurate information. Before making any financial decisions, please consult your lawyer, accountant, or financial advisor.