Cash Flow Considerations During the Coronavirus Pandemic
March 23, 2020
By: Robert G. Tweel
Your business was shut down over night for at least two weeks if not longer. What should you do to help preserve cash flow and help keep the doors open post coronavirus shut down?
Here are a couple of suggestions. Note, with regard to employees and paths taken, please refer to recent articles from Justin Harrison that address a number employee issues.
First, if you have loans, talk to your bank. The bank may be willing to defer or restructure loan payments for a period of time. You would effectively be extending your loan term. Refinance. Rates are at their lowest levels ever and refinancing may also help save on cash flow. You may also consider use of your line of credit depending upon your circumstances.
Second, the IRS has offered a tax payment deferral. Take advantage of this 90-day payment deferral. But realize you will need to make the tax payments for 2019 by July 15, 2020, and you will have to plan for this.
Third, if you have a lease, talk with your landlord. They may also be seeking loan relief and may be able to pass that on in rent deferral. It may require an extension of your lease, but it can provide you cash flow relief now.
While these are a few suggestions, the important thing is to talk now. Explain where your business is and what help you need. There are a lot of businesses in similar circumstances. The bank or landlord may not be able to offer a complete solution, but they should be able to offer some aid in this regard.