Managing Personal Finances: Smart Tips for Small Business Owners during COVID-19
Posted on 04/24/20 by Guest Author
Guest blog post from Hannah Dannenfelser, Community Involvement Ambassador at Arlington Community Federal Credit Union
The impacts of COVID-19 are creating challenges across the country, including for our local small business owners. When your business is a key source of income and sales are wavering, your personal finances may be impacted as well. Here are some tips from BizLaunch partner Arlington Community Federal Credit Union to help you manage your personal finances:
- Contact your financial institution: Reach out proactively if you have concerns about paying bills on time. Institutions may offer options such as payment deferrals, elimination of early withdrawal penalties for liquidating certificates (known as CDs at banks), hardship loans, or something else. Reach out especially early if you have concerns about making real estate payments. These departments have a high volume of requests so contacting them sooner will give them time to respond.
- Cut back unnecessary spending and set a bare bones budget: Look back through your transactions for the last month or so and look for expenses that you can cut or recurring payments that you can cancel. Do you have contracts, subscriptions, or memberships that can be renegotiated? If you have recurring payments like the gym that you’d like to use later, ask the company if you can pause payments for now. Some financial institutions provide budgeting software within mobile and online banking so set up those tools to track your spending. If your institution doesn’t offer budgeting software, you can use free apps and websites such as Mint.
- Get creative to find additional income streams: Do you have another skill or service that you can offer? Consider posting on local outlets such as NextDoor or the Facebook group “Arlington Neighbors Helping Each Other Through COVID-19” to spread the word. Check out the webinar from BizLaunch on how to pivot and re-strategize your existing business.
- File for unemployment insurance if needed: The CARES Act allows states to provide unemployment insurance to self-employed or gig workers who don’t usually qualify. File through Virginia Employment Center at www.vec.virginia.gov. Note that unemployment offices have a high volume of requests so it may be hard to contact them. Keep trying to reach them even if you can’t get through right away. If you need further support, look into small business loans and grants, such as the Paycheck Protection Program, Economic Injury Disaster Loan, or Arlington GRANTS program.
- Consider low interest debt options: Evaluate your options with your financial institution to see what the right fit is for your situation. If you need to borrow, using a Home Equity Loan or Home Equity Line of Credit may be a less expensive option than higher-interest options like credit cards or unsecured personal loans. For those who don’t own homes, look no further than your car. Auto loan interest rates are very low right now, letting you easily take advantage of your car’s equity. Make sure to compare rates between institutions so you can find the best deal. It never hurts to ask for a rate match or lower rate.
- Monitor BizLaunch & Arlington Chamber updates: Follow BizLaunch and the Arlington Chamber of Commerce for timely updates on resources available to support your business. They are sharing current information on options like SBA loan options, grant opportunities, and more.
We know that our small businesses are struggling right now. We also know that Arlington is committed to creativity, community building and resilience. If your business challenges are impacting your personal finances, reach out to your trusted financial partners to evaluate your options.