Coronavirus Not Just A Health Issue

Coronavirus is the word on everyone’s lips in 2020. The disease, named COVID-19, is a new version of a large family of viruses. It, along with other coronaviruses, is common in people and certain animal species. 

COVID-19 was first detected in China at the end of 2019 and has since spread to over 150 locations. The World Health Organization declared it a pandemic in March as the disease continued to spread. 

As the severity of COVID-19 grows direr, it has gone beyond a global health issue. COVID-19 has had an impact on the economy, mainly due to recommendations to stay at home and self-quarantine. Small businesses, in particular, bear the brunt of this economic decline. 

Impact of COVID-19 On Businesses

Any significant hits on the economy often have a greater effect on small businesses. Many such enterprises operate on low-profit margins under normal conditions. For them, this global outbreak makes a less than ideal situation far much worse. 

New restrictions on social gatherings cause a reduction in clientele for many businesses. As a result, revenue is much lower, especially for businesses without the option to switch to delivering services. 

Some small business owners now rely on personal savings to keep their business afloat during the pandemic. Without a cure in sight, it’s hard to know how long they can survive before burning through all their savings. 

People working at small businesses risk losing their jobs as COVID-19 forces indefinite shutdowns. The disease also makes it hard for startups seeking funding during the pandemic to get financial help. Some governments, companies, and banks have begun offering money to small businesses to help them through this crisis. 

Resources To Help Small Businesses Survive 

COVID-19 continues to spread and strain financial markets, and businesses are in desperate need of financial help. Here are a few resources that they can consider. 

Disaster Assistance Loans

The Small Business Administration (SBA) offered to help businesses suffering severe economic injuries from COVID-19. It’s offering loans for up to $2 million at low-interest rates to help pay off debts, payroll, and other expenses. 

Small businesses with access to credit are not eligible for this loan. For companies with no available credit, an interest rate of 3.75% applies, while non-profits get a rate of 2.75%. 

Government Loans and Grants

In some areas, local governments are offering financial help through small business loans and grants. Some governments have also increased small business grants. Other areas such as Washington State, also plan to provide no-interest loans for small businesses with limited cash flow. 

Banks and Credit Card Companies

To assist during this crisis, some banks have limited-time offers to waive monthly service fees for small business owners. A business can also opt for a commercial loan from the bank to cover operating costs and other significant expenses. 

Workers for affected companies may consider personal loans as a solution. As long as the borrower’s credit score is good, getting an unsecured loan won’t be much of a hassle. 

Grants From Companies and Organizations

Facebook is offering $100 million through its Small Business Grants Program. Only 30,000 small businesses in 30 countries can get this grant to cover operational costs, rent, and payrolls. 

The Bigger Picture

While small businesses have the most to lose, the global economy as a whole faces severe destruction. The coronavirus has become one of the biggest threats to the global economy, leading to plunging stock prices and bond yields. 

China has the majority of confirmed cases. Containment measures in place include city lock-downs, restricted travel, and suspended business operations. As it is the world’s second-largest economy, the negative impact on it is sure to bring a massive blow to the global economy as well. 

Conclusion

COVID-19 is a major health issue, but also so much more than that. There’s no cure, treatment, or vaccine available for it yet, hence the widespread panic. All that’s available so far are containment measures such as social distancing.

In trying to contain the health issue, these measures have led to a massive disruption of the economy on a global scale. Businesses have shut down, and travel bans are in place indefinitely. With no end in sight for the medical condition, we may very well be heading towards a global economic recession.