To borrow or not to borrow under COVID-19 circumstances?

To borrow or not to borrow?

Small businesses strapped for cash after weeks of downtime and an uncertain cash-flow future are being tempted by various sources with a variety of lending offers. But beware! Borrowed money has to be paid back and, in the meantime, has to be funded.

The small business owner’s decision to borrow or not borrow at this time is far from simple, mostly because the future is so uncertain. And even if borrowing is a well-considered solution there’s the added concern that not all lenders are created equally ethical or legitimate.

And here’s another and most important consideration . . .  Regardless of what overly-optimistic politicians seeking reelection might proffer, this dangerous, debilitating, disruptive COVID-19 intruder might turn out to be more difficult to dislodge than hoped. And who knows what eventually awaits the small business owner on the other side?

So, on balance, the hard to face but realistic bottom line may be that borrowing may just be digging a deeper hole.

Consult an accountant or business adviser. Get third-party, objective, dispassionate advice. Crunch the numbers. Borrowing might just be delaying the inevitable or it might be a lifeline; it’s not a decision to be taken lightly at this time.