Unforeseen events can be very devastating to one’s personal and business life. Situations like fire, damages to products or stock, illnesses of your main employees, or failure of your computer systems will impair your daily functions.
It would be very difficult to manage your day-to-day business activities when you are facing a crisis. And now, with the pandemic, 97,966 business establishments in the US have ultimately shut down and have never reopened as mentioned by Fortune.com. This statistic was also reported by Yelp.com’s Local Economic Impact Report, and it is alarming.
The world is facing a recession worse than the Great Depression, and the World Bank website declared a supposed 5.2% global economy plunge by the end of 2020. Losing clients, closing down shops, and going out of business is dispiriting, to say the least. But there are business-saving ways to eliminate, in part or whole, such terrible financial issues. You can resort to business finance options.
National Tax Reform Expert and CEO of Engineered Tax Services (ETS) Julio Gonzalez wrote in his online article at Forbes.com titled “Tips For Protecting Your Business During A Crisis” that small businesses can apply online for Small Business Administration’s Economic Injury Disaster Loan Program. It is a working capital loan of up to $2,000,000, with a cash grant of $10,000 on a first-come, first-served basis.
The SBA Paycheck Protection Program (PPP) loan is also an option. The program can help with salary expenses and other main operational costs of a business. With this, the application is through banks with a forgiveness feature – if qualified, the balance of the loan not forgiven will be paid through installments for 24 months at less than one percent interest.
SBA Micro-loans is also available for start-ups and those businesses in the beginning phase. A business with a qualified business plan, as presented, can avail of up to $50,000.
The SBA Express Loan program can provide up to $350,000 in as short as a few days. No waiting for weeks or months for the loan to be approved, but the interest rate is slightly higher compared to other SBA loans.
As for the 504 SBA Loan program, it can provide a loan of up to $20,000,000 for fixed assets. The business and the owner must, however, show capability of paying the loan and release a down payment for such.
If qualified, your business may be able to receive a tax refund due to changes stipulated in the CARES Act. Qualified improvement property can now be expensed compared to the old law’s depreciable asset treatment. Losses from previous periods can also be carried as refunds to change the tax returns. Consult your accountant about this since it can be a beneficial cash infusion.
Bank loans, online loans, micro-loans, merchant cash advance, cash flow loans, business credit cards, and vendor financing are some possible options as well. But one must have a good business credit score before resorting to these loans. Otherwise, it will not be approved.
To save your struggling business, you may need financing assistance. You will also have to formulate a business continuity plan which is a lesson learned from the pandemic. This is to help you cope with a crisis, just in case, a terrible event happens again. Of course, in that plan, the responsibilities of key people in your business must be detailed. Furthermore operating functions with corresponding resources will be specified. For a more accurate creation of the plan, check this guide.
A business owner must remain positive that the economy will bounce back, as long as businesses are now prepared for the future. One must have that “business as usual” outlook while working on getting the business back up and running, work-from-home or otherwise.