The Importance of Financial Readiness During COVID-19

“Financial readiness” for businesses is more important than ever during COVID-19.

As we continue to provide pandemic assistance, we notice that some business owners have been unable to apply for the SBA Economic Injury Disaster Loan (EIDL) or the Paycheck Protection Loan because their financial records and books are not in order.

Shelly Gross Wade, the President & CEO of FSC, first a Prince George’s County financial services corporation and now an SBA Funds Administrator, states, “Business owners need to take the time to devise a turnaround plan for sustainability. Re-evaluate their customers’ needs, update their corporate documents, automate their financial records, and by all means maintain a good credit score. How business is done in the future will be dramatically different. After Covid-19, everything must change!”

To prepare, here are financial readiness tips for current business owners and anyone considering starting a business:

  1. Build a relationship with a reputable bank. Don’t just open a business bank account; get to know a loan officer. Make the bank work for your account.
  2. Work with a CPA or at least a bookkeeper.
  3. Have a current business plan always at the ready.
  4. Have an attorney you can call on.
  5. Make sure all yearly taxes are filed and complete.
  6. Make sure any payroll taxes are paid.
  7. Make sure any employee state quarterly reports are filed.
  8. Make sure you are using Quickbooks (the gold standard) or some form of an accounting system.
  9. If you have employees, work with a payroll company.
  10. If possible, automate financial records.
  11. Learn how to read and interpret business financial documents.
  12. Solve any personal or business credit issues.
  13. Maintain a good business credit score.

Companies must financially prepare before applying for everyday loans and lines of credit, and this is particularly important for the next round of SBA Covid-19 funding. MWBC provides this type of assistance on a regular basis, previously in person, now virtually. In addition, we provide one-on-one business counseling, financial webinars, professional technical assistance referrals, business plan review, and so much more.

Reach out to a business counselor for more information on how you can become financially ready for your next step.

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