expert tips to navigate your business during COVID-19

15 Expert Tips to Navigate Your Business and Finances During COVID-19

Formations Team

18 Mar
These experts provide some valuable tips for what you can do to weather this storm and come stronger on the other side.

The saying goes that the only constant in life is change. At Formations, we partner with our customers to manage their finances, so any impact they may have on the rest of their changing lives is either negligible or positive ones. In our dedication to providing you with all the help and service we can during this health crisis we have gathered some 15 great tips from some of our leading experts and our partners at Formations: 

Shahar Plinner – Formations CEO and Noted Tax Guru 

  1. We do not recommend that you file an extension for your 2019 return at this time. The IRS has just issued a 90-day extension for tax payments to help cope with the crisis but you should still file your return. Why? Because the official return is what solidifies the financials for the last year in the eyes of lenders and if you want to take action on new investment opportunities or refinance (especially with rates as low as they are right now), you want to be able to acquire debt. 
  2. Pay the 2019 federal balance due by 4/15 not before so you can plan your cash flow for the next 30 days. But do NOT postpone it in 90 days even if you can per the new IRS announcement.
  3. Build a house budget. Think in terms of the “NEEDS” vs “WANTS” and plan accordingly. Not eating out or having food delivered, suspending any travel plans, identifying any excess subscriptions (online or otherwise) that aren’t necessary at this point in time.
    Apps like You Need a Budget can be a great resource to simplify and automate budgeting but come with a bit of a cost. There are Google and Microsoft templates people have posted for use that are free and super helpful in getting a handle on your personal finances.  

Aaron Meyer – Head of Client Success at Formations 

  1. Consider suspending payroll processing, for the time being. You can always catch up and pay those taxes a little later in the year once the crisis is past. 
  2. Reduce travel and meal expenditures if possible. Depending on your location this may not be a choice as some states like Washington and California have already ordered restaurants and bars to close to in-person diners, but if you can avoid ordering in and suspend any travel plans that will also help your cash situation. 
  3. Reach out to the Small Business Administration about a low-interest bridge loan. Rates are set at their lowest in years and can be paid off over 10 years in some cases. 

Dietrich Miklautsch – Senior Loan Advisor at Guild Mortgage (Recommended Partner)

  1. A mortgage review makes sense for most people right now, so it doesn’t hurt to have a review and a plan if the rates dip. Also, a cash-out refinance with low rates could be safer than using cash to pay off debts right now.
  2. Filing tax returns is a need/request for a mortgage.  Consult your trusted loan officer before filing. 
  3. Right now interest rates are incredibly low; you can apply for a Home Equity Line of Credit, get as much as you think you’d need in a real cash emergency, then don’t use it unless you need it. A good safety net can save lives, but you hope you never need it.
  4. Think about plans for the timing of holding a property.  If the goal is around 5 years, a 5yr or 7yr ARM could save you tens of thousands of dollars over those periods. 

Paul Adams – Financial Advisor at Sound Financial Group (Recommended Partner)

  1. Be sure you keep your emergency fund intact.  You may be tempted to invest your emergency fund to buy the market as a discount though you will better weather these changing times if you have cash on the sidelines for a “rainy day.”
  2. Talk about your plans for the future with your spouse.  Talking about the future you want personally, professionally, and financially over the next 3-5 years will help you get your head above the current fog of uncertainty created by COVID-19.
  3. Spend time thinking about where the opportunity is for your industry given the changes in habits that the American public will have over the next 6 months.
  4. Reassess your household spending. Right now we are all changing habits.  You may find that there are things that you pay for that no longer contribute to the way you enjoy your life.  This may be a great time to see where money could be leaking from your balance sheet through your spending.
  5. Know your investing timeline. If you are planning on taking income from your investments to fund your retirement, and you will live to 85, that is your investment time horizon.  If you are well-diversified hold your strategy through the volatility.

Now is the time to connect with your “Dream Team” of finance. Financial Advisor, Real Estate agent, Insurance agent, Estate Attorney, and tax person to get information, take advantage of market opportunities, and get in order your legal docs. We at Formations have built relationships with some of the top people in these fields and can help you connect with them to better your financial positions and come out of this crisis with the best advantages to keep your business and personal lives on track. Call or make an appointment with us today.  

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