Addressing a Cash Crunch in a Crisis
Whether your business is down or shut down during the novel coronavirus pandemic, you may be looking for ways to deal with a cash crunch in the coming months.
SPEDCO is a nonprofit, state-wide economic development organization. We have been helping small businesses access capital for real estate, buildings, and equipment through U. S. Small Business Administration programs since
Bette Davis Eyes
was the top of the top 40 . Our team has helped business owners access capital, expand, and adjust – in good times and in bad.
Here is what we share with our clients:
This unprecedented crisis has shut down some businesses for the time being. For those that are able to operate, the first order of business is to seek creative ways to increase revenue. We are seeing lots of restaurants shift to take out and delivery, retailers moving to emphasize website and social media sales, and other businesses pivoting to long-term marketing.
There are lots of ideas to consider, but the best resource is often your own creativity. Think outside the box to find ways to address revenue.
As your business adjusts to the next few weeks – and to the extent you can predict – the next few months. Take a look at your biggest expenses and see where you can reduce or delay. Talk to your vendors, partners, landlord, and lender. All have a stake in your success and some may be willing to defer payments.
One option is sales and use taxes. The Minnesota Department of Revenue is granting a
30-day Sales and Use Tax grace period
for businesses required to suspend or reduce services under
Executive Order 20-04
. For businesses that need to layoff - or significantly reduce hours for - their employees, the Minnesota Department of Economic Development has modified unemployment insurance rules and has information for
With revenues maximized and expenses addressed, many businesses will still need access to additional capital. If this applies to you, your first call should be to your financial institution. Your local bank or credit union may be able to assist with lines of credit, refinancing, or other tools.
Another potential source is the U.S. Small Business Administration. The SBA has created a special
Economic Injury Disaster Loan Program
for businesses hurt by COVID-19. This program will provide working capital loans with 3.75% interest and terms up to 30 years for businesses injured by the pandemic. The state of Minnesota is working closely with the SBA and these loans should be available downtown Saint Paul soon.
Best of luck as you navigate this time. Business owners are resourceful and creative. Your community is rooting for you.
Chief Executive Officer