The World Health Organization announced Wednesday that coronavirus (COVID-19) is officially a pandemic. With its widespread nature, governments and organizations are implementing protective measures. Many are restricting their travel, working from home, and avoiding large groups of people. These things, and other factors, are presenting businesses with a variety of challenges.
One question many business owners are asking themselves is, “How will I be able to manage my business’s finances during this time?” Managing loans or just keeping a business afloat during a lull or shutdown period brought on by COVID-19 can be challenging and confusing. Fortunately, there are some ways businesses can plan and navigate this turbulent environment.
Common Issues Businesses May Encounter
COVID-19 has unfortunately presented businesses with a list of potential problems. While it is important not to panic, it is just as important to be aware of some of the possible factors. Access to capital may be the biggest concern for businesses. Things like payroll and inventory are affected by market fluctuations, so businesses should prepare by assessing their access options as soon as possible so that they can adjust accordingly. Fortunately, the Small Business Administration (SBA) has rolled out an assistance plan for small businesses affected by COVID-19.
There are additional factors to consider. These include workforce capacity, employee wellbeing, inventory, supply chain, insurance coverage issues, changing market demand, marketing, and cleanup. It is critical to contact insurance providers and suppliers to get a read on the situation. Additionally, business owners and managers should be developing contingency plans for the factors above, whether the overall situation becomes worse, stays the same, or starts to improve. Doing so will mitigate the collateral damage leveed on your business by the virus.
Decreasing Revenue With Oncoming Loan Payments and Other Expenses
A significant potential challenge for companies is losing business while still having to make payments on loans, rent, and other expenses. While this may seem like an insurmountable situation at first, there are steps people can take to mitigate some of the damage to their business.
FDIC and Banks
On March 9, the Federal Deposit Insurance Corporation (FDIC) released a statement that they are working with federal and state banking agencies to help customers who are affected by COVID-19. Additionally, the FDIC stated that regulatory agencies are encouraging financial institutions to work with customers. This is potentially good news for those businesses facing less revenue and mounting payments.
In the meantime, companies can reach out to their issuers, and inquire if they may be willing to adjust their existing payment plan. Also, if a business has an emergency savings fund, it may need to start dipping into it until it resolves payment issues.
The White House and SBA Assistance
President Trump has signed an economic assistance package into effect to help assist both businesses and workers affected by COVID-19. This comes as one of the numerous steps the federal government has recently taken to deal with the mounting situation in America.
Additionally, the federal government has instructed the SBA to supply affordable loans that will assist businesses and workers affected by the outbreak. Congress is in talks to fund the program with an additional $50 billion. The SBA has also provided resources and guidance for businesses on their website.
As the situation develops, so too may the potential challenges for businesses. Owners and workers can better navigate these hurdles by adopting a proactive approach, by utilizing government assistance, and by continually staying informed. The Centers for Disease Control and Prevention have provided href=”https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html”_blank”>interim guidance for businesses and workers during the COVID-19 outbreak on their website.
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