The unfolding of the novel coronavirus around the globe has resulted in decreased income, shortage of labour, and reduced demand, majorly because of the lockdown. It has had an adverse impact on businesses. Most of them are finding it tough to stay afloat because of low cash-flows and disrupted finances. There are some options that can come in handy and prepare you for recovery from these tough times.
Read on to know about the ways that help you in overcoming credit shortage during the lockdown –
To Manage The Shortage Of Credit During Lockdown
Leverage the virtual working system to keep your business going:
Most parts of India are under lockdown. The businesses dealing in “non-essential” items are facing the worst hit, and to top that off, various restrictions are making things even more difficult. While these strict rules and restrictions are crucial for the health of the public, they have a huge impact, especially on small businesses, as they depend on in-person sales. Though lockdown breaks the chain of virus spread, it has had a severe effect on the cash flow of small businesses.
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The good part is that you can take advantage of technology to meet the requirements of your customers. This solution will not only generate revenues but also sort your financial issues. For example, training sessions can be conducted on live-streaming apps, dental or veterinary services can be provided via video conferencing or phone. However, you can consider in-house appointments in emergency cases. These short term solutions are ideal for generating some income and ensuring cash flow.
Fulfill your cash shortages with short-term loans:
There are several venture capitalists like Indifi that offer credit or short-term loans to medium and small scale businesses without collateral. The top companies ensure easy documentation and a hassle-free and quick process of loan acquiring. Moreover, the complete procedure is customized according to the needs of the business owners.
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Since the source of stable income has become challenging in this unforeseen period of crisis, the aspect of minimal documentation gives a little ease to the businessmen. You don’t have to deal with ‘too much’ to cut the credit crisis.
Additionally, venture capitalist firms offer the benefits of flexible repayment to their clients. You can use this credit for inventory management or working capital. These types of loans are an ideal option for both small and big businesses.
Adapt to the changing trends in consumer demand:
The coronavirus pandemic has changed customer behavior drastically. Most likely, the requirements of your customers would have shifted too. So, embrace the change and give people the products and services they are looking for at present. Look for hacks to elevate your sales level in this critical time.
A reboot strategy could save you from losing out customers to your competitors. Keep track of the preferences and needs of your customers and act accordingly. Chart out a plan that can be implemented in this critical hour to get the best out of the sales funnel.
Continue to promote your products/ services:
Spread the word via social media or email. It’s time to use the email addresses of the customers available to you. Alternatively, you may figure out ways of offering your services through the virtual model. Promote your brand and email your prospects, informing them about your new products and services.
If you are shutting down your business temporarily promote things like gift cards without mentioning the expiration date. It is one of the best solutions to meet your cash flow requirements. Clients can reap the benefit of these once the lockdown is lifted, and you reopen your business.
Besides, you can promote the new offerings of your brand on social media platforms. Reach out to your followers and keep them posted with regular updates. Doing so will keep your customers informed about the current status of your business. It is one of the best ways to engage your customers even if they can’t visit your store in person.
Learn about the financial assistance programs launched by the government:
Understanding the current state of businesses, the government has come up with various financial assistance schemes that can help in combating coronavirus outbreak fallout. Gather details about the national, state, and local assistance programs launched by the government to help medium and small businesses, such as the COVID-19 Startup Assistance Scheme (CSAS).
The program is introduced to provide financial stability and assistance to new businesses. They can reap direct benefits from this scheme as it will provide quick access to the working capital.
Several similar schemes have been introduced by the government to support companies whose liquidity and cash flow have reduced drastically due to the pandemic. Brands can use such programs to meet their working capital needs, such as administrative expenses, salaries, payment to suppliers, rent, etc.
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Request for a grace period from your suppliers and landlord:
These unforeseen circumstances have adversely affected the cash flow; hence, it is becoming tough for people to meet their liabilities. The solution is to reach out to your supplier, landlord, and vendor, and request some leniency in the payment terms. It is one of the most ideal ways to deal with the revenue shortage. Things can turn easier if your supplier/ landlord offers a grace period. Or, you may ask for some discount on the supplies or rent of the property.
So, this was all about the essential tips that you can bring into practice to keep your business running and maintaining healthy cash flow in this tough hour of the pandemic. From small to large, businesses of all sizes have been affected.
The lockdown has made the going even harder. But, instead of focusing on the adverse, we need to focus more on the solutions to ease cash flow problems. We need to alter our working style and adapt to the changing scenario. Look for potential alternatives for revenue generation. Understand the market condition and work accordingly. Most importantly, be patient, it’s going to take long for the market to recover. Don’t expect an instant surge in the demand when the lockdown is lifted completely.