SME’s around the world have suffered tremendous damage in the wake of the novel coronavirus.
The pandemic shuttered operations from China to New York, South Africa to Greenland, and everywhere in between.
With countries slowly trying to come to grips with the aftermath of the chaos, many hard realities are now being faced. Businesses facing financial ruin have had to lay off employees in large numbers, as consumer demand craters.
Facing the prospect of bankruptcy and liquidation, several businesses opted for CARES Act
loans to keep employees on the payroll. Beyond the immediate ramifications of reduced revenue streams, businesses face long-term perils in the form of limited cash flow and mounting debts.
While SMEs are struggling, global economic activity is contracting. At a macroeconomic level, the world has witnessed trillions of dollars being wiped off the financial markets, with the Dow, Nasdaq, S&P 500, and other bourses frequently going into freefall.
Priorities to Consider
Experts in business management have suggested a checklist for reopening your business. The factors to consider are diverse, and include the following elements:
1. In an era of growing economic uncertainty, debt is regarded as the single-biggest bugbear to profitability. Expenses need to be cut, and financial padding needs to be put into place.
2. With safety being a primary consideration, hand sanitizers, face masks, gloves, and
plexiglass divisions may need to be incorporated into daily operations.
3. These priorities must be considered against the backdrop of newly revised safety and
training protocols for the health, and wellbeing of all concerned.
The focus of government bailouts and Federal unemployment programs is simply to ensure the continuity of business-as-normal in an abnormal environment.
We are living in ‘interesting times’ and the global landscape looks nothing like what any of us could ever have imagined before. What is clear is that we are treading into an uncertain future and we must plan as best we can to make accommodations for our businesses and our way of life in this new world.
What Options are Available to Stem the Rot?
Whenever a crisis emerges, the best line of defense is a sound financial plan. It requires
meticulous planning to meet the exigencies (urgent needs) of a safe workplace in today’s times. Fortunately, businesses have rights i.r.o. what options are available through government-funded programs. As part of the CARES Act, businesses can enjoy protections in the form of Employee Retention Tax Credits, Economic Injury Disaster Loans, and of course the Paycheck Protection Program.
The degree to which a business can access these funds depends upon the availability of
resources. While these options were certainly enticing to business owners at the time they were rolled out, they were riddled with complications.
For starters, applications were often problematic with lengthy delays in processing, bureaucratic red tape, and too much uncertainty. Virtually no live customer support services were available, and funds quickly ran out leaving many small businesses in the lurch.
Alternative options provide rapid relief for getting your business up and running during this
financial meltdown. These other loans include SBA 7 (a) loans, online loans for small
businesses, business lines of credit, and inventory financing.
With financing in place, businesses will want to focus their efforts on maintaining a safe workplace for employees and customers. The safe-distance requirements have largely been embraced by society, but guidelines need to be implemented to guarantee the safety of customers and employees too.