What QuickBooks can do to help small businesses survive COVID-19
Due to the Coronavirus pandemic, the government has issued stringent guidelines on self-quarantining, social distancing, and lockdown to prevent the virus from spreading further. Though these steps were taken to ensure the protection and well-being of people, they have had a significant effect on the small-scale sector. Food and beverage (F&B), automobile, electronics, and textiles are among the worst-affected sectors. For example, the restaurant dining industry is experiencing a 30–35 per cent drop in business.
Given the high proportion of fixed costs in the food service industry, a sudden drop in sales could result in significant restaurant losses.
Similarly, the automobile industry, which was already suffering from a general slowdown in demand, will suffer even further due to the COVID – 19 outbreak. Given the financial and economic hardship that SMEs are experiencing as a result of COVID – 19, all stakeholders, including the government, customers, retailers, investors, and large corporations, must work together to help SMEs survive the virus.
How to protect SMEs from COVID – 19 Consequences:
The Federal Government: Political officials and corporate leaders have been pleading with the government to offer financial assistance to small businesses. To deal with the Coronavirus pandemic, the finance ministry is likely to consider providing financial service to traders and small businesses. Given this, the government should assist in combating the current crisis in the following ways:
Loans for Natural Disasters: According to a trade group, the government can obtain these loans at low-interest rates and extended periods. These loans can be obtained at low-interest rates for a long time. As a result, small companies may use the loan money to cover expenses such as salaries, short-term debt payments, and other bills.
Apart from that, the government may consider extending Cash Bridge Loans based on both Fund and Non-Fund limits. This will assist SMEs in increasing domestic demand and, as a result, overcoming supply chain interruptions. Due to the SME sector’s increased reliance on China for inputs/raw materials, such disruptions have occurred.
EMIs are being postponed: The government might think about deferring loan payments. This moratorium on principal and interest repayment will offer immediate financial relief to offset demand reductions and cope with operating expenses. Apart from that, banks may consider waiving service fees and other penalties for both daily and small business customers.
Benefits from Taxes: Since the spread of COVID – 19 would affect earnings in industries such as aviation, tourism, and food and beverage, it would be difficult for companies to pay corporate taxes.
Local Purchases: Both Offline and Online To prevent the pandemic from spreading further, local restaurant owners and other small businesses have closed their physical stores or outlets. Though such interventions effectively prevent infection in the general population, they have a significant economic impact on small businesses.
As a result, as customers, you can help them buy products or inventory that you may need when in self-quarantine from local businesses’ online stores/platforms. If the local companies do not have online shops, they can help them by shopping at their physical locations.
Waived Fees: Food distribution companies should consider lowering or eliminating commission fees in light of the Coronavirus outbreak. As the new regulations prohibiting people from entering public places take effect, fee waivers or reductions by food delivery companies may be a good way for restaurants to get some much-needed relief. Restaurants’ food delivery service, which was once merely a source of revenue, has now evolved into a significant source of income for restaurant owners. As a result, food delivery companies will help the restaurant industry by reducing or waiving fees.
To assist small businesses in combating COVID – 19, large corporations can step forward and provide financial assistance. They may, for example, consider waiving commission fees for providing services to small businesses such as independent restaurant partners. Besides that, more giant corporations may provide small enterprises with financial assistance in cash grants. These grants assist companies in meeting their rent obligations, connecting with clients, and covering overhead costs. They may also set up their fund dedicated to small businesses or donate to organisations that assist SMEs in dealing with the crisis.
To conclude, Small and medium-sized enterprises (SMEs) are the backbone of the Indian economy and have been particularly hard hit by the COVID-19 outbreak. Since the days ahead seem unpredictable, the small-scale sector is bound to suffer more consequences. As a result, all stakeholders, including the government, customers, and large corporations, must work together to help SMEs weather the storm. I hope that this blog helped you and was worth your time.