FINANCIAL SURVIVAL
FINANCIAL SURVIVAL IN THE PRESENT CRISIS
The time to ACT in NOW.
No longer can we convince ourselves that we will somehow get through this. The truth is that you will have a decrease in cash flow and if you don’t act now the chances are you are going to fail. Thankfully there are many ways businesses can survive financially and even take advantage of the opportunities that government and financial institutions implement. A disaster/pandemic or other type of “emergency” as defined by local or national governments frequently frees up large amounts of cash to keep economies stable. (Please see insert form governments website below) Whether a hurricane, tornado, floods, fires, or a pandemic, look for finance to be an opportunity that occurs rarely yet is a clear opportunity if you are prepared.
Therefore it is important that you stay up to date on the changing conditions. You need to watch and read the news frequently so you don’t lose out on any relief measures that are implemented. Proactive planning and a sound financial strategy is important. Make sure you understand what needs to be done to access these measures and this might mean getting on the internet to download forms and forward information to the relevant institutions. Don’t wait because the sooner you do this the quicker you will access the relief. It can’t be stressed enough, the need to get additional credit and even extend credit during these uncertain times. Securing more credit or additional lines of credit can help stabilize cash flow and ensure that your business has funds to meet the changing times.
Before seeking additional forms of funding, business and individuals need to answer the following questions and evaluate your current situation.
► Exactly how much do you owe right now?
► Who do you owe it to?
► When do you have to pay?
► Does the lender or creditor offer a payment plan?
► Have you talked to the creditor or lender about options?
► What are the consequences of not paying?
► How soon will this crisis be over?
Once you have a clearer picture of the circumstances there are many avenues to consider. There are several options available to help you manage a financial crisis:
► Credit cards – Credit cards are one of the easiest and cheapest ways to borrow money in a financial crisis. Credit cards work best for a short-term problem that you know you can repay in a few months. You can keep your credit score healthy by keeping your balances below 35% of each of your credit limits.
► Savings – Deciding to access savings during a financial emergency may seem like a bad idea, but it is actually a smart move in some situations. You will not have to pay interest or fees on the money you borrow from a savings account. .
► Debt help – Read articles about taking control of your debts and compare debt reduction solutions.
► Personal loans – You can borrow cash with a personal loan. These loans have a 1-4 year term and work best if you have a stable income and need a large amount of cash for a financial emergency. The annual percentage rate for a personal loan range from 5-20%.
► Home equity loans – If you are a homeowner and you have equity in your property, you may be able to cash out some of your equity by refinancing. These loans can also work for consolidating your debts. Be very careful about using a home equity loan, however. The loan is tied to your home. If you cannot make the payments, you could risk losing your home.
Regardless of whether you need short term gap funds or longer-term financing options, the time to start planning is now. Don’t panic. Be thorough and thoughtful and work with a professional to give you the best and more accurate advice. Getting a business coach might be the first step to your business success in these ever-changing times. Because to stay competitive every winning team needs a great coach. A coach can be objective, candid and provide you with a perspective you might not have considered. If you want to get through this unprecedented time, get a Business Coach. It might be the most financially sound thing you do to keep your business afloat.
** SMMEs are advised that the Department of Small Business Development has published, on its websites, the Guidelines for Application for the Debt Relief Finance Scheme and Business Growth/ Resilience Facility. The online application form will be available from Thursday, 02 April 2020. It is important to note that only SMMEs that are registered on the database will be considered. Please go to https://smmesa.gov.za/ to register your business.
In addition, the Department has also published Requests for Proposals to existing South African owned, registered and tax compliant SMMEs, which are in the medical supply and non-food field. The RFPs are aimed at getting information on SMMEs that have the capability to participate in the manufacture and supply of goods that are needed towards the management of the impact of the Covid-19 pandemic.
The RFPs are:
1.DSBD/COVID-19: 25/2019/2020: Critical Non-Food Essentials
2.DSBD/COVID-19: 26/2019/2020: Hygiene, medical products manufactured or related services
The documents can be found in the following websites:
SMMEs are encouraged to make use of our alternative email at info@dsbd.gov.za or call our Hotline number 0860 663 7867.
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