Borrowers May Get Some Relief From Coronavirus Crisis

Some relief may be on the way for business owners and individuals trying to find a way to repay their loans during the novel coronavirus crisis.

The Federal Deposit Insurance Corp, which insures bank deposits, this week urged banks to “show understanding” and work with customers affected by COVID-19, whether through business closures, slowdowns or illnesses.

“In some situations, the FDIC encourages banks to allow customers to skip loan repayments without adverse consequences for the borrower, extend loan terms, and restructure loans,” the agency said on its website. .

Ally Financial Inc., one of the largest online lenders, has announced that it will defer car loan and mortgage payments from customers for up to 120 days.

Banks in the San Antonio area say they are also helping customers, but offered few details.

“We are implementing a fast-track process to enable the rapid approval and implementation of loan modifications,” Vantage Bank Texas spokesperson Alex Polanco said in an email.

As of today, its 25 branches are only open by appointment.

Broadway Bank CEO and Chairman David Bohne said website that it makes special arrangements for commercial and corporate loans, deferral of payment on auto and installment loans, and waiver of certificate of deposit liquidation fees.

At the Bank of San Antonio, President J. Bruce Bugg Jr. said he works with business clients on a case-by-case basis. Its bankers have seen a small to moderate increase in the number of businesses using lines of credit.

Businesses do this “so that they have additional cash in their checking account – beyond their normal cash levels – to help them with their contingency planning … due to the coronavirus,” he said. he declares.

“I think this is a prudent step on their part, as none of us really know how to cripple the business implications of working through the coronavirus,” Bugg added.

Frost Bank spokesman Bill Day said he is compiling information for businesses and consumers and is expected to have a webpage activated this morning that they can go to if they have any questions.

Bank of America customers can request to defer payments on small business loans, auto loans, and home loans. They can also request refunds on various charges. The bank is suspending foreclosure sales, evictions and repossessions.

Meanwhile, Bexar County is reaching out to small businesses.

County Commissioner Justin Rodriguez said he was reflecting with County Judge Nelson Wolff on how to help small businesses in the area fight for survival. The couple managed to get the county to put $ 5 million into a fund that would provide interest-free loans of up to $ 25,000 for local small businesses that can be used to pay rent, payroll and rent. other expenses.

The loans are supposed to act as a bridge until small businesses can take advantage of federal assistance programs.

“We want to make sure it helps those who need it most,” Rodriguez said.

The fund would be administered by LiftFund, which provides financial assistance to start-ups, restaurants and other businesses that cannot obtain loans from traditional financial institutions.

In addition, Bexar officials are working on setting aside $ 250,000 for a micro-grant program for companies with three or fewer employees. Grants could reach $ 5,000. LiftFund would administer that as well.

“It is devastating for a small business owner to see their doors close,” said Janie Barrera, CEO and President of LiftFund. “What we want to do is keep these businesses alive during this time. Working capital is so important to be able to support these small businesses so that they don’t have to lay off. “

Since the programs were announced on Wednesday, LiftFund has received 65 business inquiries.

County commissioners are expected to vote on the proposals on Tuesday. Once funding is approved, LiftFund will initiate the application process on its website.

Patrick Danner is a San Antonio-based writer who covers banking and civil courts. Read it on our free site, and on our subscribed site, | [email protected] | Twitter: @AlamoPD

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