Companies of all sizes, across most industries, are experiencing financial hardship as a result of the COVID-19 crisis. With businesses mandated to pause or restructure, owners are facing layoffs, reduced (or depleted) revenue, and potential closure. During this downtime, it’s critical for business owners to make financial viability a top priority so they can position themselves […]
Companies of all sizes, across most industries, are experiencing financial hardship as a result of the COVID-19 crisis. With businesses mandated to pause or restructure, owners are facing layoffs, reduced (or depleted) revenue, and potential closure.
During this downtime, it’s critical for business owners to make financial viability a top priority so they can position themselves for a return to prosperity. One of the first things they should do is explore funding options to help carry them over in the interim.
The government, banks, and private lenders have stepped up to provide financial assistance to help small-business owners and professionals navigate this uncertain time. However, the SBA’s financial relief loans through the CARES Act have presented challenges to some business owners, such as funding limits, eligibility requirements, and service time. In these cases, business owners can consider a conventional business loan, where incentives like deferred payments can provide borrowers with relief.
An injection of working capital can help business owners do the following.
1. Pay the bills. Even if a business is on pause or staff are working remotely, utility bills, rent or mortgage, taxes, insurance fees and more still need to be paid. Improving cash flow can help owners cover these necessities.
2. Pay employees. In a time of uncertainty, people are relying more than ever on their paychecks and health-care coverage. A loan can cover these costs to ensure employees come back to work once restrictions are lifted. Good employees can be hard to come by, so owners are doing what they can to keep them on payroll.
3. Pay down debt. USA Today reported that the average small-business owner has $195,000 in debt. That’s likely spread out among many creditors, which means juggling multiple balances, interest rates, and due dates. A debt-consolidation loan can combine outstanding debts into one payment, which could potentially save you money in the long term.
4. Invest in the future. Owners should think about the immediate demand for their services once the economy re-opens and how they can come back stronger. Perhaps it’s time to consider new equipment, technology, or marketing. A loan can help owners invest where it makes sense in order to work more efficiently, better serve customers, and drive more revenue.
Unfortunately, the economic shutdown didn’t come with advance warning, and many owners are finding they weren’t properly prepared. All of a sudden, employers and employees are dealing with the financial effects of the pandemic, wondering if — and how — their livelihood will survive. If a business was successful before, then chances are strong that it will eventually recover with some help. By seeking out the right mix of financial solutions today, owners can set themselves up the path toward success.
Chris Panebianco is chief marketing officer at Bankers Healthcare Group, which says it is a provider of financial solutions for licensed health-care practitioners and other highly skilled professionals. Contact Panebianco at chrisp@bhg-inc.com