As we’re all quite aware, it’s been a whirlwind couple of years across the board, including and especially financially. The impact of the pandemic has left both businesses and individuals with a lot of unanswered questions about what lies ahead. Navigating the new normal can be quite a challenge.
From PPP and other loans to credit scores, unemployment, and savings, now is a great time to take a step back and start figuring out what comes next for your financial health.
What businesses should do following the PPP loan.
We are now past the point of applying, receiving, and spending PPP loans, and have moved into the next phase of applying for forgiveness. But as we move forward even further, what will the impact be on your business? Here are a few things you can do now to continue the recovery process and set up for success while navigating the new normal.
- Keep your books up to date. Whether you tackle your bookkeeping in house or outsource it to a professional, it should be something you keep track of year-round — not just when tax time rolls around. Many businesses faced challenges when applying for PPP because their bookkeeping had fallen behind. Keep your books up to date regularly to avoid any hiccups like this upon future events.
- Update your business plan. The business landscape has shifted rapidly, so your business plan should reflect this and holster the ability to adapt to economic changes. It will encourage you to consider unique details about your business and financing needs and how to strategically set yourself up for the future.
- Start a line of credit. Many businesses continue to battle with minimal cash flow, and even those with enough revenue have found customers and clients are still unable to pay as quickly. This causes roadblocks that can affect business’ ability to pay suppliers and vendors. Starting a line of credit can allow you to increase cash flow without having to pay interest on your outstanding balance.
How individuals can tackle challenges caused by the pandemic.
Businesses are not the only ones who suffered financial hits from COVID-19. Rest assured, navigating the new normal is not just a business challenge. Many individuals have lost their jobs, had their hours reduced, or have taken pay cuts among other struggles. While some of these circumstances are improving, it leaves many people concerned about their ongoing financial health, such as credit scores, mortgage payments, personal loans, and more.
Many banks have been taking proactive steps to meet the financial needs of individuals impacted by the pandemic. If you are concerned about making mortgage payments, missing loan payments, or incurring late fees, you should contact either your institution or your loan servicer as soon as possible to explain your situation directly and find out how they can help you stay on track.
Monitor your credit score and credit report.
Credit scores are also a common concern, and there are a few steps you can take to lessen the burden. Pay what you can on your loans, if only the minimum. If you cannot, reach out to your lenders and creditors to see if there is any assistance available. It’s also wise to consider adding a brief consumer statement to your credit reports to help explain your financial situation. Keep in mind that late payments don’t appear on your credit report for at least 30 days after missed payment, so you may still have an opportunity to pay before it significantly impacts your credit score. Last but not least, consider using Credit Insights in the Republic Bank Mobile Banking app to stay on top of all things credit.
As you progress, remember that taking a step back and planning for the future is always a smart decision. Create a vision to determine how you can best maintain a stable spending and saving ratio to protect your finances from unexpected events. At Republic Bank of Chicago, you are not alone in navigating the new normal. We’re here to help guide you through these uncertain times and into the future. If you have any questions regarding the impact of COVID-19 on your individual or business finances, please don’t hesitate to reach out to us by phone at 800-526-9127 or read our other posts for additional tips and advice.