Masks and Cash Flow

Written by CMG News Contributor, Doug Carleton

Here we go again. The Delta variant is causing chaos and confusion, and all of this in its various manifestations could affect your cash flow. How? Fear for one thing – and the press is hammering it for all it’s worth for another. The Delta variant reportedly spreads quickly, and infections and hospitalizations are rising rapidly in many states. Many people are now worried about not being vaccinated. Vaccinations are spiking, but in some cases – whether vaccinated, not vaccinated, masked or not, some caution (or fear) may be creeping into peoples’ thinking – “Just maybe I’ll wait a little longer to go to (or go back to) X, and if your business might be one of the X’s, suddenly your sales may start declining. And while many small businesses made it through the first round of hits to their businesses, and even though the likelihood of shutdowns and restrictions probably won’t happen again, another hit – even if not as bad, may not survive another.

Here is one solution to consider if possible. If you have short-term debt on your balance sheet – credit card debt as one example, do whatever you can to convert it to a longer-term so that your monthly payments are lower. Every little bit helps. And if it’s possible, the best choice is an SBA working capital loan with a seven to ten-year term, which is not callable. Extending the term on any eligible short-term debt could mean a significant improvement in your cash flow. This option may not be available to most small businesses simply because they do not have a lot of short-term debt, but anything that can improve cash flows during these uncertain times is worth looking at.