All across the United States, local and state governments are asking their residents to remain at home and only leave for essential errands. This has left many companies, and small local businesses, facing some difficult decisions. Small businesses are crucial to the United States economy. They employ more than 47 percent of the workers in the private sector. Their contribution to the nation’s GDP is over $5 trillion. There are some ways small business owners can protect themselves during these difficult economic times.
Communicate With Policy-Makers
There are proposals in Washington DC calling for massive amounts of aid for small businesses. Now is the time for entrepreneurs to take action. Communicating with policy-makers is something done in partnership with other small business owners or individuals. There are many ways to communicate ideas and concerns. Achieve this with letters, phone calls, email as well as social media, and more. Each of them is effective in a different way. The method is essential, but the message is more important. It is imperative to be respectful and consistent in speaking about relief needed to survive this crisis.
Secure Liquidity
Access to cash is essential for a small business to survive. According to the Small Business Administration, approximately fifty percent of small businesses are not operating after five years. Small business owners must advocate for immediate liquidity for their business to remain solvent. Currently, legislation is in progress that would increase the limit for SBA loans. The Treasury would also like to forgive financial assistance to small businesses if they were solvent before the crisis. The small business would have to rehire its former employees within a year. This would provide immediate cash to small companies impacted the most.
Access To Capital
A relief plan is designed by government officials to assist small businesses. This will help them cover expenses as well as payroll and more. There is a proposal where the Small Business Administration would waive fees for one year on all of the 7(a) loans they provide. All loans would have a 90 percent loan guarantee without regard to the size of the business. The legislation is called the User Endurance (RESCUE) Businesses Act of 2020.
The goal of every small business during a time of crisis is surviving. Survival will require having sufficient capital and more to be able to begin operating when things return to normal. Communicating your requirements with policy-makers is the best way to meet your needs and small businesses are solvent long into the future.