Pandemic Impact on Businesses & Families
How the pandemic is affecting small businesses and local families
Nov 18, 2020
2020 has been a tough year for so many people and businesses due to the Pandemic. Companies have downsized, laid off employees, or closed their doors to never open again. Such a hard hit on the economy has resulted in selling of homes, businesses, liquidating assets, bankruptcy, or foreclosure, causing many to be unsure on what steps to take throughout the process.
Common Issues Small Businesses May Encounter:
- Inventory and Supply Chain Shortfalls –With downsizing and layoffs within manufacturing companies, establishments are struggling to obtain inventory to stock shelves, limiting availability of products to the costumer.
- Changing Market Demand – With public concern of exposure there may be an impediment of customers reaching your business, resulting in a decrease of revenue and changing the market demand.
- Marketing – Marketing of product and services increases in cost to ensure that the customer is aware that they are safe in establishments and to ensure the customer is aware that product and services are still available.
Common Issues Families May Encounter:
- They don’t have enough “safe” assets. By far, the most important predictor of serious delinquency is whether a family has at least two months’ worth of income in the form of “safe” or liquid assets, such as cash and checking and savings accounts. If they don’t, they are about 300% more likely to be seriously delinquent than those who have at least that buffer (or more).
- They have too much debt relative to their income. The next most important factor associated with serious delinquency is whether a family’s debt obligations exceed 40% of their income. If the family’s debts are over that threshold, they are about 200% more likely than those who aren’t as leveraged to be seriously delinquent.
- They lack good health. Families reporting “fair” or “poor” health were nearly 60% more likely than those reporting “good” or “excellent” health to report a serious delinquency. This highlights how health problems (such as COVID-19) can lead to financial instability.
- They are supporting family or friends. Families providing financial support to relatives or friends were 41% more likely to fall at least two months behind. In addition, each child in the family increased the likelihood of a serious delinquency by 17%.
- They own vehicles. Those who own vehicles are 35% more likely than those who don’t to report serious delinquency; it’s possible that a vehicle loan itself is a source of delinquency.
Some businesses have been able to keep afloat by accessing crisis funding, relief efforts, and tapping into reserves. However, with the uncertainty of the pandemic and the length of time it will be in affect may cause most individuals and/or businesses to resort to liquidating everything they have and starting over.
Theurer Auction/Realty offers consulting services that can help individuals and businesses decide which plan may best fit the current need. Some of the services include Real Estate Sales, Business Liquidation, Personal Property Liquidation, and More. Call today to schedule your appointment to discuss what services will help you, your family, or business in this time of need.