Amidst coronavirus (COVID-19) fears, the stock market’s uncertainty caused the Dow Jones Industrial Average index to see its worst drop since the market crash in 1987. On Friday, Mar 13, President Trump declared a national emergency over the COVID-19 pandemic. Travel restrictions, schools, local and national sports in a halt; the country is running on limited bases. What’s more, economic scares aren’t restricted to global markets and large companies; small business owners in the U.S. are feeling the effects of this pandemic. And the outbreak doesn’t show signs of slowing down.
At Evolution Capital Group, we know it’s frustrating to find it challenging to get the capital to finance your business, and we’re here to help.
Banks Fear Business Owners Won’t Meet Loan Obligations
The Organization for Economic Cooperation and Development estimates that economic growth could shrink four to five percent in the second quarter of 2020. Showing its slowest growth since the 2007 to 2009 Great Recession.
In light of this news, many banks may be reluctant to finance small and medium-sized companies because they fear business owners won’t meet their loan obligations due to revenue declining in the coming months. The concern many financial institutions have don’t go without justification. Employees calling out sick and customers staying home to avoid public places and crowds will present a challenge for local businesses, such as local restaurant owners or retailers, to balance the already tight profit margins they work with on a day-to-day basis.
Lack of supplies and an inability to replenish inventory, and shortages of components and deliveries, are some of the other issues business owners face. And these effects are more severe in communities where patients have tested positive for COVID-19. Many small businesses in local communities may face long-term effects these quarantined times will have on daily life and work.
How to Help Your Business During Outbreak Development
It’s not easy to determine when life and the economy will go back to normal, but it won’t be in the next few months. As the coronavirus outbreak continues to develop, the next six to nine months may be the hardest yet.
We understand if you’re concerned about how the coronavirus will affect your business. Here are four steps you can take to help your business.
- Be flexible and find work alternatives that suit your workflow: If your business depends on person-to-person interaction, find ways to compensate direct contact. Phone calls and teleconferences can be a great way to keep meetings and projects moving forward. Offering Livestream content through social media platforms will help you maintain some interactions with your customers.
- Encourage employees to follow the Center for Disease Control protocol: Hygiene is crucial more than ever. Promote awareness among your employees and customers by providing them with information about the outbreak and the steps to take to contribute to everyone’s health and safety.
- Take precautions if you need to travel: As a business owner, you may need to keep up with business relationships or widen your network. Taking extra precautions will ensure you maintain your health. Bring antiseptic wipes to disinfect frequently touched surfaces around you and in the plane, in your method of transportation, and where you’re staying.
- Check your insurance policy: The total revenue loss due to business interruption caused by the global spread of the coronavirus is projected to reach billions of dollars. Make sure you review your insurance policy to ensure it will cover any losses caused by the impacts of the outbreak.
Don’t panic if you can’t get funding from a bank or if you find out your insurance policy won’t cover the losses of the impact the coronavirus is having on your business. There is always another option.
Getting Capital Shouldn’t Be Difficult
The Small Business Administration is setting guidelines to help small businesses across the U.S. appropriately respond to the COVID-19 outbreak. And many business interruption insurance policies are intended to protect business owners against losses sustained because of factors that disrupt normal operations. Unfortunately, some small and mid-sized business owners may still require extra capital to cover losses not recognized by their insurance. While others may find themselves in need of quick and accessible funding while waiting on paperwork for other types of financing to be approved. Evolution Capital Group offers different funding options, which aren’t based on traditional loan requirements, and allow business owners to manage their funds with more flexibility.
We encourage you to stay informed and follow the Center for Disease Control recommendations to take precautions regarding your health and well-being. And if you need capital to support your business, but you’re holding back due to the outbreak causing fear and uncertainty in the market, don’t hesitate to contact our financial advisors and schedule a free consultation today.