COVI19, a one-word horror story has taken the world by storm. It has jolted the whole world with its gruesome impact. It has not only had disastrous effects on the medical industry, but also the educational industry, farming industry, fashion industry, and, our today’s prime focus; the business market.
However, in this period, digitalization has been at its peak. Most of the world’s population resorted to the internet to maintain their sanity and connect with people. The online world was not just used for entertainment purposes but it also helped people from all walks of life in getting their work done. As students were busy typing “assignment writers near me” in the search bar; many people took it to YouTube to express their creativity and some were busy creating podcasts or reading journals. This shows how the digital world helps cope up with the depressing outcomes of the virus.
How Gravely Has the Business Market Been Affected?
Businesses have undergone major losses due to the shutdown and ongoing pandemic. Not just this, many globally recognized brands have faced bankruptcy. This is all due to the lockdowns imposed throughout the world. With everyone locked up in their homes, the employees and customers both, businesses were inevitably being affected. Prominent changes in consumer behavior, COVID19 also had severe implications on the global economy.
Business Loan Programs Harming Small Businesses:
If you compare, small businesses who do not work on big profit margins and don’t have extravagant financial reserves to survive a crisis like any natural disaster or in this case; a global pandemic. They also have fewer ways to access financing. It is estimated that one in four US businesses is on the verge of permanent closure.
When it comes to business loans, it might sound like aid but it harms small businesses, let alone benefits it because of the following reasons;
Getting Aid Is Not Easy:
Back in 2008, Hurricane Ike is known as the third costliest storm, in the history of the US which caused the US government $30 billion in reimbursements and destroyed countless businesses in South East Texas.
It was found that most of the small businesses which applied for federal assistance never got the aid. Even though it was an aid, it was still a loan, so the banks needed to make sure that the ones we are providing the loans must be able to return it. And this was determined by one thing small businesses lacked; credit history. On the other hand, companies and corporations which were old and had a large number of employees were estimated as less financially risky by the loan provider, so they got most of the financial assistance.
COVID19 aid obstacles:
To combat, financial catastrophes faced by small businesses, Congress passed a Paycheck Protection Program. According to this program, small businesses, especially those who suffered closure due to the crisis will be provided with small interest loans and might even turn into grants if they meet the criteria.
However, similar trends were observed with this aid. Although, there is a difference of the loans turning into grants in the COVID19 assistance still the rest are required are to fulfill the requirements of repaying the loans. In doing so, small businesses could face a very sharp drop in revenue which will just further harm their business.
Paper Works Are Another Barrier:
Big corporations and companies have all the necessary paperwork digitalized if not in physical form as they are operating on a much larger scale. For small businesses, it is much more difficult to acquire all the documents. Apart from this, big companies have whole departments dedicated to managing their financial engagements and expenditure, so it is way easier for them to navigate through the loan procedures. When you think of small businesses, they don’t have this luxury as they are already operating on such a small scale.
This extra impediment just makes the chances of a small business acquiring a loan much less likely.
How easy the world would have been if it was as easy for a small business to acquire a loan as it was for a student sitting in London looking for the best essay writing service UK has revealed. Situations can change if the government intervenes and regulates the aid provision. Banks should make need a priority and provide loans for those who cannot afford to continue their businesses. We should take it as an opportunity to help each other.