The only certainty right now when it comes to the Coronavirus (COVID-19) is that currently, everything is uncertain. Several local and state governments have issued a shelter in place orders asking people to remain home and only go out for the essentials. Many small, local businesses are feeling this stress as they have been forced to lay off employees, adjust their hours or services, or even close their doors for an indefinite amount of time.
Small business is a critical part of our economy, employing about 58.9 million people in the USA – almost half of the total private sector workforce. It’s vital that small businesses survive the pandemic and here are some tips that can help.
- Apply for Small Business Administration Loans. Under the Small Business Workforce Stabilization Fund, the US Treasury would provide immediate cash flow to vulnerable businesses that qualify to keep employees on the payroll and help the business grow once the pandemic subsides. Loan limits for the SBA Express have also been increased from $350,000 to $1 million. Click here for more information.
- Explore Private Sector and Fintech Options. The government isn’t the only option that you have for securing additional funds to weather the Coronavirus storm. Many private sector companies, like Facebook, are offering grants to small businesses. Other companies, like Kabbage or Fundbox, are also supporting small businesses by providing specialized loans to small businesses – they are also working on other ways to support the sector as well.
- Use your Line of Credit. Lines of credit are designed to bridge cash flow issues – now is the time to use them! Only pay interest on the funds you are utilizing.
- Be a Master Negotiator. We are all in this together and landlords and suppliers understand the strain being put on small businesses. If you are able to, renegotiate terms of contracts, debts, due dates for rent or accounts payable. You won’t get a yes unless you ask.
- Encourage customers to shop differently. One of the simplest ways to boost cash flow now is to encourage your customers to buy gift cards now to be used at a later date. Do you sell goods/products but aren’t able to have your doors open right now due to being a non-essential business? Consider selling your products online if possible. You can set up a quick website or even sell products via Facebook or other social media or selling platforms. Are you in the foodservice industry? Many businesses are providing food to their customers by offering curbside pick-up, delivery, or even providing DIY kits to take home to make their favorite restaurant treats, like pizza kits or cupcake decorating kits – they come with all the fixings to make at home!
- Offer a discount. Yes, it might seem counterproductive, but discounting your product/services to entice more customers to buy from you is far better than no sales at all. Depending on your business you can discount the purchase of goods or you can even offer a discount for services paid for now but performed at a later date once shelter in place restrictions are lifted.
- Communicate. Communication is always important, especially in times of uncertainty. Communicate with your suppliers, customers, employees, business partners, banks, etc. If they are a vital part of your business, communicate with them. You can let customers know on your website or social media of any specials, changes to your operation, including hours, etc. You should try to give your employees as much notice as possible to changes in their hours or responsibilities, etc.
Small businesses within our communities provide jobs and economic growth to local economies. This is where most Americans are feeling the impact of the pandemic —coffee shops, restaurants, gyms, and retail stores are all closed; friends and family members are losing jobs. While you can’t plan for the unpredictable, you can be as proactive as possible. If you have questions about loan options to help ease financial stress, don’t hesitate to give us a call.
Senior Vice President, Chief Lending Officer