Often times a business will need financing to purchase new equipment, to invest in future growth, or to resolve cash flow problems. But there are also times when additional funding is needed to deal with unexpected and unpredictable economic issues. As the threat of coronavirus (COVID -19) continues to change and grow on a daily basis, small businesses across the country are being affected.
The spread of COVID-19 has impacted many different businesses, but the ones that have taken the brunt of the hit are businesses in the travel and retail industry. Businesses in the travel industry have seen a decline in the number of people travelling due to several travel advisories and fear of being infected by COVID-19. In fact, according to an article by Business Today, Expedia plans on laying off 3,000 people as coronavirus hammers down on tourism.
Moreover, Chinese restaurants in Canada have seen a significant decrease in business since the spread of COVID-19. According to an article by CBC, some restaurants have seen a 70% drop in business.
Retail businesses in Canada are also being affected as China is Canada’s second-largest supplier and many businesses rely on them for a wide range of goods from raw materials to finished products. With the global supply chain disrupted due to COVID-19, businesses are experiencing delays in receiving their inventory. In fact, according to an article by Fortune, in America where the virus is more prevalent than in Canada, 75% of businesses have seen disruptions in their supply chain which has lead to an increase in lead times which then affects their ability to complete orders.
If COVID-19 continues to spread, Canada can use America as a prediction of future troubles their businesses may have to hurdle over.
Secure Your Financing
As the threat of COVID-19 continues to grow, businesses in Canada may need some extra business funding to continue to operate. In countries where COVID-19 is more prevalent, you may be able to find financing offered by the government for businesses that can prove they’ve incurred a loss due to COVID-19. However, rather than waiting for government assistance, it is better to be proactive as economic slumps make it harder for businesses to borrow money.
Click here to check out current government financing options.
Merchant Cash Advance
A merchant cash advance is a great financial tool for emergencies as it is easy to access and can help finance any business need. It is a loan where the lender will provide you with a certain amount of money in exchange for a percentage of your future sales. This repayment method gives you flexibility and you won’t have to worry about making fixed payments, as the payments fluctuate with your sales. So, if your business sales decline, you don’t have to worry about making high payments. As such, it can truly be a great source of financial support during economic turmoil.
Business Line Of Credit
A business line of credit is a revolving loan that you can draw against according to your needs. It works a lot like a credit card where you are given access to a certain amount of money which you can use and reuse as you pay it back. A business line of credit is a great solution to increase working capital and cover the costs of unexpected expenses. This makes it a great way of combatting any potential decline in business cash flow due to COVID-19.
Business Term Loan
A business term loan is basically a regular installment loan that is only available for businesses. It a lump sum of money that a lender will extend to you with the agreement that you will repay him with interest over a period of time. Depending on how much you need and how you structure your payments, term length can vary between 1 to 25 years. This makes it an attractive method of financing as it makes payments affordable and gives you time to recover from economic dips. Moreover, you can use it to finance anything such as an unexpected expense, new equipment, or to improve working capital. A business loan term can also help you pay for a new supplier if your inventory is tied up in China due to COVID-19.
Want more options? Click here to learn more about alternative ways to finance your business.
Though you can’t control how COVID-19 will affect external factors that disturb your business, you can control it from entering your door. You can avoid internal chaos by keeping your employees safe. Here are a number of preventive measures you can take to mitigate direct exposure to COVID-19.
Review your health policy – Make sure you review your health and safety policies and protocols with your employees. This will ensure they remember and follow them appropriately.
Implement more hygiene measures in the office – Investing a little extra money in having the office cleaned more regularly can help contain the spread of COVID-19. Making hand sanitizers and other safety products more accessible will also help in limiting COVID-19 exposure to your employees. You can also encourage hygienic behaviour by hanging posters and notices concerning precautions your employees and clients can take to avoid being infected. This can include guides and pictures on proper handwashing, coughing, sneezing, and face touching.
Ask employees to work from home when possible – Having your employees work from home is one of the best ways of preventing COVID-19 from spreading. If an employee shows up to work with flu-like symptoms, send them home or isolate them to prevent possible infection.
Bottom Line
It is unclear how long COVID-19 is expected to last or how much it will affect Canada’s economy. While the government of Canada is working on mitigating the effects COVID-19 might have on consumers, businesses, and the economy as a whole, it’s best to stay informed and have a plan in case things go south. If you feel as though you may require financial assistance in the near future, it may be in your best interest to secure it soon rather than after your business has been negatively affected by COVID-19.
