Are you still struggling to pay the bills – and your employees – nearly three years after the onset of COVID-19? If you are feeling frustrated by a lack of financial assistance programs available at this late stage, the solution might come from a shocking place.
For many people, the pandemic is a problem of the past. While COVID-19 continues to plague many areas of the planet, the widespread availability of vaccines and viable treatment options have reduced the need to worry so much about the virus.
Unfortunately, people’s finances have had a harder time bouncing back than their peace of mind.
As such, millions of people continue to struggle to pay their bills. Small business owners are also continuing to battle against the burden of debt. This is especially true in a marketplace where inflation has led to rising costs and reduced sales. Because so many people are still struggling to make ends meet both at home and for their businesses, many companies have had to close their doors or dramatically cut costs.
All of this has left many business owners wondering if there is still financial assistance for businesses available. During the height of the coronavirus pandemic, many government agencies offered financial assistance for businesses and individuals alike. These days, though, that help is harder to find – and business owners are paying the price with their livelihoods.
When businesses and individuals were struggling during the early days of the COVID-19 pandemic, the government did its best to swoop in and intercede. Federal and state-level financial assistance programs were created to help business owners cover costs, so long as certain specifications were met.
The most well-known among these was the Paycheck Protection Program. However, after multiple rounds of applications were taken and payments were sent for this program – and much controversy ensued as a result of oversight and misuse of these funds – the funds have been exhausted.
Likewise, another federal program known as the Emergency Capital Investment Program has since dispersed all allocated federal funds. These were used for organizations and businesses that were particularly beneficial to their local communities and helped many companies continue serving underprivileged areas during tough times. Unfortunately, this program is no longer open to applications.
With so many financial assistance programs no longer accepting applications, it can seem like there is no help available for cash-strapped businesses. While these kinds of programs are generally no longer available, there is some good news at the federal level that will have an impact on Florida businesses and the families who run them.
A series of small business tax credits became available during the height of the pandemic, such as the Employee Retention Credit and the Paid Leave Credit, both of which allowed businesses to keep doors open and employees paid during difficult times. Likewise, new tax credits aimed at small businesses were included in the Inflation Reduction Act which will help small businesses of all kinds reduce their tax obligations and save money to put toward important debts and other expenses.
The problem is, many struggling businesses cannot afford to wait until tax time. If this is the case, you are likely looking for a more immediate kind of financial assistance and may be feeling increasingly desperate to find it.
The Case Against Taking Out New Loans or Lines of Credit
If all of this information has left you feeling a little bit hopeless, you might be tempted to take out a new loan or open a line of credit. That promise of quick and easy money sounds great, especially when you are struggling to pay bills and employee salaries. But given the fact that most business owners are already balancing debt with everyday expenses, new credit cards or loans can be a serious misstep in times of trouble.
Maybe instead of a new credit card or bank loan, you have been tempted by cash advances or other until-payday programs. These are even more dangerous for your business and your personal finances. These programs are typically only backed by the lender themselves and come with major strings attached in the form of hefty interest rates.
For those that absolutely must find cash quickly to keep their business afloat, consider speaking with your local credit union. They may be able to help you find financing with a better interest rate and workable terms. Your safest bet is always to take out the smallest possible loan or line of credit until you have a more stable revenue stream, though – or avoid borrowing altogether if possible.
Many business owners who are seeking financial assistance do not find it in time to keep pace with the monetary needs of their businesses. This can put them weeks or months behind on payments and make keeping employees on the payroll very difficult. Thankfully, there are some options that do not involve taking out new loans or jumping through proverbial hoops to get government financial assistance for businesses.
Consider the option of Chapter 11 bankruptcy for your business. Many people shudder to even think of bankruptcy, but the truth is that this process can actually be a huge financial assistance for businesses. During Chapter 11 bankruptcy, your business may be able to work toward paying off debts at a more manageable pace. The business may also be able to keep its doors open and employees on the payroll throughout the process – a big reason why many business owners choose this option in the first place.
There are plenty of other benefits to choosing bankruptcy as your business’s path forward. You can receive an automatic stay, which will allow you to continue operations and move through the bankruptcy process without fear of having your assets seized or dealing with creditors anymore. For future exchanges, your bankruptcy attorney can handle everything for you. This leaves you and your team free to focus on serving customers and clients.
If you are considering bankruptcy for your business – or just want help exploring your financial assistance options – contact the team at the Van Horn Law Group. Our experienced bankruptcy law firm has the knowledge you need to navigate business or personal bankruptcy. We have been helping Florida business owners just like you find sensible solutions to their financial stresses for years – and we cannot wait to help you find yours! Give us a call today to learn more!
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