The Small Business Administration, Facebook and other sources are offering small business help amidst the coronavirus pandemic
Small businesses across the U.S. are feeling the brunt of the coronavirus pandemic after mass shutdowns and Americans staying at home and practicing social distancing in an effort to curb the virus spread — and small (and larger) chiropractic clinics are no exception.
“When you run out of cash, as a small business you’re dead,” says Karen Mills, who led the U.S. Small Business Administration from 2009-13 and now works as a senior fellow at Harvard Business School, speaking to the Journalist’s Resource. “And at the very least they will start not being able to pay their people, which will be devastating for people who rely on that for their income. So this is a matter of huge urgency.”
As revenue numbers dissapate or dissapear, businesses without a reserve will experience cash-flow issues that will impact employees and families in a chain reaction.
As a response from the U.S. government, $50 billion has been allocated to the Small Business Administration (SBA) for Economic Injury Disaster Loans for small business help.
“First thing you have to understand is half the people who work in this country own or work for a small business,” Mills says. That’s half of America’s jobs…There are 30 million small businesses in America. Twenty-four million of them have no employees; they are sole proprietorships. It is that person and their business.”
Mills says that businesses on an average have 27 days of cash flow before they will run out of money, making the timing of these coming days and weeks particularly urgent. The U.S. government will try and avoid the slow recovery from the 2008 crash that was due to banks freezing and lending halting, causing 1.8 million small businesses to shutter in the first quarter of 2009.
“Economic injury” situations can also occur in the aftermatch of hurricanes or other disasters, like the BP oil spill.
Mills says the economic injury loans at that time said, “If you can show your cash flow is affected more than X percent, that you are going to suffer from this disaster not of your making, then we will give a 30 year, very low interest, basically cash-flow loan to make it through this period of time so you can operate again.”
Small business help on the way
While Presdient Trump has announced the $50 billion in loans for small business help, the details are yet to be filled in.
“I was very pleased to see President Trump announce in his speech that he was going to do $50 billion of these kinds of SBA economic injury loans,” Mills says. “Now, many things were not clear in that speech, including whether how he is funding this, and how to make this a part of the package. I’ve just been on the phone with several folks from Congress to make sure this actually gets implemented. $50 billion is a very big number. It [ultimately] doesn’t cost $50 billion to do these loans because some significant portion of them are repaid. It’s actually a very efficient way to deliver a lot of aid very quickly.”
Frank Sorrentino of Fox Business says, “Remember, it’s important not to panic. Reach out to your banker for help. Look at this as a way to weather the downturn and also position your business for greater profitability in the future and or look to change how you do business.”
Be nimble and flexible — Utilize technology to connect with clients, rework your employee reporting plan, take advantage of video conferencing and digital banking for customers and patients.
Come up with creative solutions — Consider house calls where appropriate or tele-conference with patients.
Differentiate your business from the competition — Use this time to understand your biggest competitors, learn from their strengths and weaknesses, poll customers as to what their needs are.
Check your cash flow — Project cash requirements 3-6 months ahead when possible. Have proactive conversations with your bank to determine a short-term solution.
Facebook also announced they’ve created a $100 million program for small business help with the coronavirus in the form of grants and ad credits, where up to 30,000 businesses will be eligible.
When a disaster declaration is made for designated areas within a state, information on the application process will be updated at www.SBA.gov/disaster.
For more updates and stories on coronavirus from Chiropractic Economics go to chiroeco.com/coronavirus-covid-19.