SHOULD YOU USE YOUR BUSINESS CREDIT CARD AMID THE CORONAVIRUS PANDEMIC? HERE ARE 3 TIPS TO BACK YOU UP
There’s no question that public safety should come first before profit, but this can cost small business owners some serious financial damage. Many of them are now struggling amid the COVID-19 pandemic and are unsure how they will survive. With social distancing becoming a norm nowadays, revenues have frozen across industries.
According to a representative of New York City-based debt-relief law firm Tayne Law Group, they have been getting an influx of calls from struggling business owners who have been experiencing financial problems. Many are now wondering whether it’s a good time to open a new business credit card to get them through the storm.
Leslie H. Tayne, debt-relief attorney and founder of Tayne Law Group, spoke with CNBC Select to discuss what small business owners should take into account when making this decision.
SMALL BUSINESSES ARE AFFECTED BY CORONAVIRUS
Although the economic impact of the pandemic is felt in almost every industry, the retail business is probably one of the hardest hit. With everyone advised to stay at home, people are simply not purchasing that much and numerous retail stores have been forced to close temporarily.
Those whose sales rely on daily foot traffic like taxi companies, local delis, catering, and more are also affected. Anticipated supply chain disruptions and production delays also pose a threat to businesses across all sectors during this time of uncertainty.
USING A BUSINESS CREDIT CARD DURING THE PANDEMIC
There are different ways to fund your business amid the coronavirus pandemic. This includes the Economic Injury Disaster Loan program of the Small Business Administration.
If you have an excellent credit score, then a business credit card may be right for you. This way, you can earn points on daily business expenses like office supplies. Still, you have to consider these three strategies when considering using a business credit card during the outbreak.
LOOK FOR AVAILABLE FLEXIBLE OPTIONS
Tayne states that there are small business credit cards that include flexible spending and pay-over-time benefits. These also offer flexible interest rates on some purchases. At a time when businesses may need to rely more on credit than usual, Tayne says that this can be a helpful thing.
The debt-relief attorney advises small business owners to be cautious with how they deal with debt during this uncertain time. They should also be mindful of quick fixes such as cash advances with hefty fees and higher interest.
Applying for a business credit card with a 0% introductory interest period is one way to limit the high-interest debt from immediate purchases. When weighing options, Tayne says that business owners should go with what will keep their business afloat and what won’t do that much negative financial impact in the long run. Charges should still be minimized to avoid accruing more interest over time.
REACH OUT FOR SUPPORT AND RESOURCES
Amid this all these uncertainties, stress is inevitable for most. So, Tayne recommends seeking the help of the Small Business Administration or other local and national resources for businesses and small business lending to aid you in making decisions.
Even at a time of social distancing, members of the small business community are still finding ways to lend support to each other. In fact, enterprises in Louisville, Kentucky and Asheville, North Carolina have launched websites that have listings of local businesses. They aim to encourage members of the community to purchase gift cards to help lessen their forecasted revenue decline.