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Union Commercial Capital

COVID-19: Business Cash Flow Game Plan



The affect of the coronavirus (COVID-19) pandemic on small business owners across the United States is astonishing. Business owners are trying to find ways to continue operating, but they are facing serious issues relating to cash flow. The government is launching a variety of financial assistance and relief programs to small businesses, but they will take time to deploy. This Union Commercial Capital blog post features business cash flow strategies to consider during the COVID-19 pandemic.


Save as much as possible


There is no telling how long the COVID-19 pandemic will affect the U.S. economy, so be proactive and start building up your cash reserve. You can start by totaling your company’s monthly expenses, and seeing how much cash you have remaining at the end of the month. Put as much money into your savings account that is feasibly possible. If you cut any business expenses, you will have more cash on hand. Take a reasonable amount of what you would have spent on business expenses and stash it away for the future. Putting away even the smallest amounts of cash will add up faster than you might imagine.


Ask suppliers for more flexible terms


Now that your cash flow is slower due to the COVID-19 pandemic, call your suppliers and ask them if your payment terms can be extended. If you are on a net-30 right now, switching to a net-60 or a net-90 is a great way to improve your cash flow. Longer payment terms allow you to keep your cash during these uncertain times, and you can use it to pay for things that can keep your business running. Your suppliers are in the same situation as you, so they will most likely have empathy and try to accommodate your request. Remember, you are a valued customer, and they want to keep you as such today, and long after the COVID-19 pandemic has ended.


Get a business line of credit.


Borrowing money during the COVID-19 pandemic has proven to be difficult for many business owners. Loans are hard to get approved, and they can take many weeks to finalize. That is why you should look into an unsecured business line of credit. This solution is relatively easy to apply for, and the qualification requirements are far less stringent than a standard bank loan. Most important, a business line of credit can be obtained quickly, which is welcome news if you need cash right now to make payroll, stock up on inventory, or cover the costs of other critical expenses.


Cut expenses


Many businesses have slow seasons due to the seasonal nature of their products or services, and this makes it easy for entrepreneurs to anticipate lower revenues, and plan accordingly. That was not the case with the COVID-19 pandemic. It struck without much warning and caught businesses off guard. As businesses temporarily close their doors, stay open in a limited capacity, or transition to remote work, they still have expenses. Their employees, suppliers, and vendors need to be paid. Of course, there are a number of other business expenses, such as office rent, utilities, insurance, phones, and postage. Now is a good time to review your company’s expenses to identify those that you might be able to cut. Obviously, you cannot avoid paying office rent and business insurance, and you want to keep as many employees on your payroll as possible, but there are ways to trim your budget. For example, you can put the brakes on travel, trade shows, and company perks and freebies. Also, contact your accountant to ask if you can delay certain payroll tax deposits, or break them into multiple payments.


Send out invoices sooner than later


With all that is going in today’s business world, coupled with the stress and anxiety that many entrepreneurs are dealing with, bills are being overlooked and paid long after their due dates. You can accelerate your invoicing process now to help you get paid faster. For example, try sending out invoices every 15 days instead of billing on a monthly basis. In addition, bill your customers immediately after they purchase your products or services, or when a project has been completed. If your business accepts deposits from customers (prior to projects being started), you might want to consider changing your deposit schedule. You can increase your cash flow by asking for money up front. If any of your customers express dissatisfaction with this, give them a different option. Also, let them know that your deposit requirements will revert to what they used to be once the COVID-19 pandemic ends.



As you know, cash flow is the amount of cash that is transferred into and out of your small business. In order for your company to stay healthy during the COVID-19 pandemic, it is imperative that you do what you can to generate a positive cash flow, and save cash for the future. Union Commercial Capital hopes that you found these tips to be helpful.

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