The current economic situation due to COVID19 presents an immense amount of uncertainty for any business, no one knows how long the shutdown will last, or how bad the economy will truly be hit.
Many small businesses in particular have been hit hard. Small businesses generally do not have the same depth of resources that larger firms do, but are the life blood of the American Economy. While businesses are trying to adapt as best they can, some are still forced to temporarily close and many others are facing drastically reduced revenues.
The health of the general population including customers and employees needs to be prioritized over economic health, but this situation still will create vast economic hardship for many.
Many small businesses are facing the terrible choice of having to make layoffs or potentially go out of business. In an effort to prevent this, multiple layers of government are working hard to develop a relief plan to support small businesses during the COVID19 pandemic.
U.S. Small Business Administration is offering designated states low interest federal disaster loans for working capital to small businesses suffering substantial economic injury due to COVID 19. Also for qualified expenses particularly pertaining to payroll, many of these loans will be forgiven, making them in effect grants.
Export Import Bank of the United States: is providing relief provisions for exporters and financial institutions throughout the USA. They can provide assistance for shipment, payment and liquidity problems.
TN Department of Labor can provide unemployment benefits to eligible persons who have been layed off. The department of labor also has a number of great resources for employers. Also provided by the Department of Labor are a number of job opening for persons seeking immediate employment.
As a general note any business still open should work hard to promote a clean and safe working environment. Without a healthy workforce even a successful business will have problems.
Here is a helpful resource from the CDC on how to maintain a safe work environment. If at all possible allow your employees to work from home, this is the simplest way to maintain a safe situation while still keeping the business functioning.
The Knoxville chamber of commerce has put together a great resource guide for small businesses as well: This provides many links and relevant information that might be helpful.
Included in the federal relief bill are provisions for direct payments to individuals and also a wide breadth of loan forgiveness for small businesses, effectively making funds borrowed for qualified expenses grants.
While all small businesses are different, one of the most critical focuses needs to be on maintaining liquidity and cash on hand. If you are able to stay open through curbside service or home delivery, or if you are an essential business, make every effort to maintain a revenue stream and try to minimize any expense you can. Cash is lifeblood of any businesses and working hard to maintain even a modest positive cash flow will be the difference between failure and success in a crisis like this. On top of that, businesses that are able to adapt the altered environment successfully will be the ones poised for growth as the virus is ultimately defeated. No one wants to lay off employees, and that should be a truly last ditch effort, as without them your business would not be where it is today, however in a worst case scenario layoffs are better than going bankrupt. There will not be a business left to rehire employees if you go out of business.
Be as candid as possible with all stakeholders including customers, employees, investors, banks, suppliers, and vendors. Many manufacturing and trucking companies have large capital expenses due to equipment and physical infrastructure that is needed. Try to work with suppliers and your lending partners to create a reduced or deferred payment plan that is affordable and keeps you in the black over the next 2-5 months.
We wish the best to all owner operators and small businesses and let’s hope for the quickest economic recovery possible.
If there is any way we can help, please let us know and we will do anything we can.
