Biggest Financial Challenges for Small Business Owners During COVID-19
Throughout America, restaurants and bars, entertainment places, and all types of businesses are closed or limited to takeout and delivery only. Foot traffic is almost non-existent. Small, local, and family-owned businesses are posting social media appeals to encourage people to keep supporting them during the COVID-19 pandemic. Unfortunately, many have already closed their doors because they could not stay open or make any sales.
It appears we may lose many of our small businesses, the heart of our economy.
While the federal fiscal stimulus for Americans will help many small businesses survive, it won’t cause most people to go out of their homes. The recommended social distancing is killing the businesses one by one.
How the Government Is Trying to Assist Small Businesses
The government is trying to assist small business owners, and some may be eligible for SBA loans. Others may have to find creative ways to have customer interactions while following the government guidelines that are in place.
Many small businesses can't actually get the products they need to sell, especially if their products come from overseas.
If you are a small business, one with fewer than 50 employees, you will have to use some of the federal loan money to pay and retain your employees (75%) for the loan to be forgiven. You can use the remaining 25% for rent and utilities, etc. There may also be waivers for paid leave for employees in the form of tax credits. But this will not help many small businesses as cash flow is an area most small businesses have little wiggle room.
Most small businesses have had to reduce hours for employees or just lay them off. Thus, the incredible number of unemployment filings nationwide. Laid-off workers are mostly eligible for unemployment insurance unless they are independent contractors.
One area small businesses and workers have in common is the delay in tax filings for both federal and state. In many cases, these have been postponed until June or later, depending on the state.
Landlords are often deferring rent (mortgage payments too), so small business owners have one less, large bill to pay each month until businesses can reopen.
In the end, each small business has to do all they can to reduce expenses, find creative ways to serve their clients, and get to the time when they can reopen and generate revenues closer to normal. It is the most challenging time in 100 years, and unlike any situation, anyone has faced. So, creativity and ingenuity are paramount when it comes to surviving. We will lose some good businesses but can recover if everyone supports our local suppliers, restaurants, and so on.
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