How to Handle the Financial Impact of Coronavirus
The spread of novel coronavirus (COVID-19) has created mass panic and disruption worldwide.
China was the first country impacted and is furthest along in the process of dealing with trying to eradicate the virus. Much of that process has included shutting down businesses and factories, where many of the world’s goods are produced. This, combined with the spread of the virus to more and more countries, has begun to interrupt the global economy in a major way.
In the U.S., many businesses are struggling if they are unable to receive shipments from factories overseas. Others are facing the reality of the stock market crash. While even more still are dealing with decreased consumer spending. Additionally, because many businesses have begun to cut hours or shut down completely, the individuals involved are also impacted because they’re unable to make their regular paycheck.
Your Business and Coronavirus
If you’re a businessowner whose business is affected by coronavirus, you could be facing major financial stress that may get worse before it gets better. All kinds of businesses – from airlines to Wall Street to retailers – are feeling the effects of coronavirus. If you’re making less money as a result of the virus, you may need to consider cutting back your expenses. This may include making difficult decisions, such as cutting business hours or closing entirely until the country and the world recover.
If you do decide to remain open, be cautious of quick fixes. Things like merchant cash advances (MCAs) can seem tempting when you’re desperate to make ends meet. However, they’ll likely hurt you more in the long run. And many MCA companies will be taking particular aim at businesses that are particularly vulnerable as a result of coronavirus. If you do need to take on debt to stay afloat during this difficult time, try to start making a plan now as to how you will recover once you’re able to get back to relative normalcy. Like with personal finances, businesses should also have an emergency fund. Now would be the time to turn to those savings.
Your Personal Finances and Coronavirus
Because so many businesses are feeling the impact of coronavirus, the effects are trickling down to individuals. When businesses aren’t making enough money, they may not be able to pay their employees their typical wages either. If your personal finances are affected, you’ll need to adjust accordingly. This may include cutting back on some expenses temporarily until you’re able to get back on your feet. Many consumers have been spending less in the face of the virus anyway, with industries like travel and electronics seeing their sales decrease significantly.
Times like these are when you should turn to your emergency fund. It’s best to turn to your savings to get through this tough time rather than using credit, if possible. Getting into debt should be your last resort because it will impact your finances much more in the long run. You may still be financially recovering long after we’ve returned to business as usual.
If you or your business are struggling financially as a result of coronavirus, you’re certainly not alone. On top of the awful global health impacts of the virus, the economic effects have been crippling as well. On either the business or personal level, turn to emergency funds first if possible. Remind yourself that the situation is only temporary and begin planning for recovery as soon as possible.
However, if you or your business are dealing with debt or financial stress in the wake of coronavirus, the professionals at Tayne Law Group can offer guidance on how to get through it and recover fully when the time comes.