Local small businesses feel the impact of COVID-19By Chanel R. Davis, Peacemaker Contributor / March 25, 2020
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A fact this isn’t lost on business leaders in the city.
Business leader Gerry McCants, owner of McCants Communications, hosted a conference call with Derek Ellington, local president and Mid-South Executive with Bank of America so small business owners can receive some vital information for the upcoming months amidst the COVID -19 pandemic.
“This is the time that we need to build infrastructure, network, relationships and partnerships with each other. This is impacting everyone. It hasn’t affected some of our current situations in terms of our business but there are people losing jobs, having major concerns with their businesses and cash flow,” McCants said. “We have to do everything to guide each other through this process.”
Ellington said that the first thing that small business owners should do is a financial checkup and evaluate what one may need to ensure that one has a safety net. He estimates that it will take at least three months to get over the economic shock of COVID-19 and longer to recover, forecasting conservatively.
“That’s looking at your cash reserves, what you have on hand today and what you can access quickly to fill in over the next few months from a lot of different sources.”
He also said to take a long hard look at your credit score, recommending signing up for Credit Karma.
“Just like with our health, it’s important that we always know the status of our credit at all times. That is another asset that you’re going to need to access in the current environment,” Ellington said. “You may need to apply for credit, and you can get an idea of the strength of your credit when you’re thinking about applying for support.”
“If you don’t feel like you need a line of credit, but you have the capacity to secure one, I would encourage you to consider one for safety, ahead of a challenge. If you know the past two or three years your company financials have been good, you’ve been improving in your business, you’ve saved up some cash reserves, and you have a really good balance sheet, there’s nothing wrong with getting a small or conservative line of credit to put in place for the future,” he adds.
Ellington also encouraged most small business owners on the line to renegotiate terms with their suppliers or anyone they make payments to if they could.
“The opportunity to get out in front of something is always a really good idea. Continue to look at your fixed costs very aggressively,” he said. “If there is potential to reduce some of those costs, you’ve helped to prepare for what we’re going to have to endure the next few months.”
On Monday, North Carolina Governor Roy Cooper issued Executive Order 120 banning gatherings of 50 or more people and closed businesses that require close social interaction and other non-essential businesses. Guidelines from the U.S. Centers for Disease Control and Prevention, which are recommendations and not mandates, call on Americans to avoid social gatherings involving groups of more than 10 for the next 15 days. These businesses should be closed and they include:
- Bingo Parlors, including Bingo sites operated by charitable organizations
- Bowling Alleys
- Indoor Exercise Facilities (ex. Gyms, yoga studios, martial arts facilities, indoor trampoline parks and rock-climbing facilities)
- Health Clubs
- Live Performance Venues
- Movie Theaters
- Skating Rinks
- Sweepstakes Lounges
- Video Game Arcades
- Barber Shops
- Beauty Salons (including waxing and hair removal centers)
- Hair Salons
- Nail Salons/ Manicure/Pedicure providers
- Massage Parlors
- Tattoo Parlors
Grocery Stores and restaurants providing takeout and delivery will remain open.
“I know today’s orders cause hardship for a lot of people. I do not treat these decisions lightly,” said Governor Roy Cooper doing a press conference Monday afternoon. “We have made them in the interest of health and safety.”
Working on a case by case basis, Bank of America’s additional assistance for clients impacted by the coronavirus includes refunds on overdraft fees, non-sufficient funds fees and monthly maintenance fees on consumer and small business deposit accounts; clients can request to defer payments and ask for refunds on late fees for consumer and small business credit cards and small business loans. Auto loan clients can request to defer their payments and clients with Home Equity and Mortgage Loan clients can request to defer payments, with payments being added to the end of the loan. The bank has paused all foreclosure sales, evictions and repossessions and has decided to not report negative credit to the credit bureau for clients who are up-to date.
“All those things can improve your cash flow until you get to the other side of this thing and be able to be back in a stabilized position to start making your payments again without an issue. We’re doing everything we can to support our small business owners through this crisis,” Ellington said.
On Mar 19, the U.S. Small Business Administration granted Governor Cooper’s request for a disaster declaration for small businesses that are suffering economic losses due to COVID-19 allowing affected businesses to apply for low interest SBA disaster loans.
For more information about Bank of America and small businesses, visit www.bankofamerica.com. For more information on SBA loans or applications call the customer service center at 1- (800) 659 -2955 or email at email@example.com.