How Will Coronavirus Impact Credit Scores And Small Business Lending Once The PPP Program Ends?

Although the PPP lending program initially got off to a rough start, small business owners are reporting that are now able to secure government-backed funding that is helping to keep their companies alive during these uncertain times.

We don’t know how much things will change when we get back to “normal,” but maintaining your credit score is an important step if your firm needs to borrow money somewhere down the road after the emergency stimulus funding evaporates.

Here are some actions you can do to help maintain your credit score during the coronavirus pandemic:

1 Check your credit report

Look for any errors that could bring the score down. Many companies will provide the report for free.

2 Negotiate Now

Ask your creditors to work with you to come to more agreeable terms. They may be understanding if they are under similar pressures.

3 Pay on time, even if you cannot pay in full

Unless you make at least the minimum payment required by your credit card company, you will not get credit for paying on time – even if you pay by the due date.

4 Cut costs

Frugality is back in vogue – not out of want, but out of necessity. If you can put off major projects or renovations, do so. If it isn’t necessary to run your business, don’t buy it. Lower your inventory. Reduce staff hours — as long as you do not endanger giving up the “forgivable” nature of the CARES Act’s Payroll Protection Program (PPP) loans that would then have to be paid back. Some employers have gained concessions on pay and cut their own compensation, as well. With the cost savings, conserve the cash for bills that you are having trouble making.