In the mad dash to get in line for the cash coming to business owners via the CARES Act, take a few minutes to reflect on your formation documents. Specifically, your Operating Agreement. If your Operating Agreement is out of date, it could delay your access to the SBA disaster loans.
Why is an Operating Agreement so important?
An Operating Agreement is the document that outlines the business operations, financial decision making, rules, regulations and general provisions for your business. It clearly identifies members; ownership levels and speaks to distribution processes. It is the governing document that all the members agree to. It is the standard for how the organization will function.
Why is an up-to-date Operating Agreement necessary for business loans?
An up to date operating Agreement allows lending institutions to analyze how your business runs. It indicates the key owners. In many instances these owners will need to give their personal guarantees on loans for the business. The document demonstrates that your business is organized, has a plan in place and functions with some consistency. Outdated Operating Agreements, such as those that reflect ownership that is not current, can hinder the loan process. For instance, a former owner of a business who has retired would not want give their personal guarantee for a company’s debt that they are no longer associated with.
How can I quickly update my Operating Agreement?
L4SB has a quick and inexpensive solution to business owners who need to update their Operating Agreements, fast. https://www.l4sb.com/services/?_sft_service-categories=documents-contractscouture-operating-agreement/ For $29.95, our Couture Operating Agreement for LLC’s is the best Operating Agreement available without a lawyer. The Couture Operating Agreement has over 100 customizable feature that you won’t fine online or anywhere else. Most importantly, you can update your Operating Agreement today, and send it in with your CARES Act SBA Disaster Loan Relief Applications.
Reach out to us today. Don’t let an out of date Operating Agreement stand in your way of receiving your share of relief from the Paycheck Protection Program or the Covid-19 Economic Injury Disaster Loan.