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Financial preparation in the midst of Covid-19

By AJ Cohen, founder and CEO of BetterMed.

The world is currently in crisis mode, as Covid-19 sweeps across nations. The virus and its subsequent health concerns, however, are only one part of the fallout. As more individuals stay home to try and slow the spread of the virus, we’re seeing businesses shuttered and whole industries decimated. Perhaps most troubling, we are not sure when – or how – this will come to an end.

As the head of a medical financial assistance company, I talk to doctors, hospital administrators and healthcare providers on a daily basis. In fact, our company works with more than 12,000 doctors and some of the largest hospitals in the world. In February, as coronavirus news gained traction across the US and Western Europe, providers began complaining of a 50% drop in business. Now, one month later, all aspects of healthcare except for critical cases have been cancelled or postponed. Experts say expect worse before it gets better.

Consider the magnitude of this issue. Surgeons, radiologists, oncologists, general practitioners and a wide variety of specialists are cutting caseloads to free up needed resources for current and future Covid-19 patients. While many medical facilities will be overrun with more demand than they can manage, other providers will see a total stop in their business. These healthcare professionals are looking at ways to shore up their business now, to withstand an unknown future.

It’s not just the medical industry feeling pressure. Travel and hospitality are faltering — in the US, the airline industry is discussing a potential bailout with the government. Retail is down and food and beverage industries are struggling to stay afloat. Small businesses will arguably suffer the most, while we are in unprecedented waters for the millions of 21st century, gig economy workers around the world.

It is doubtful that anyone will remain unscathed by the coronavirus pandemic, however, there are areas of business that can be addressed and strengthened, even during challenging times. Healthcare providers, who stand at the front line of a pandemic, are seeking ways to shore up and safeguard their practices. Other industries, small businesses and gig workers alike can take away important lessons, both what to do and what not to do in the middle of navigating a financial crisis, by watching the medical industry.


In good times and bad, cash flow is king. Hard times can turn a steady stream of cash into a trickle, so staunching the hemorrhage of cash is always priority number one.

Experts always recommend that revenue streams are diversified, so your business is not solely dependent on one source for income. How do you do that in the midst of a crisis where everyone is evaluating cash flow?

Medical providers have been focused on the spread of coronavirus from early days, but they failed to make efforts to diversify quickly. Doctors and hospitals had the opportunity to offer new and different treatment services or partner with other practices, but many felt stymied by the sudden drop in business and failed to act quickly enough. Others, however, have found a great opportunity to shift their services from non-critical care into helping on the front lines. It’s amazing how many ways you can diversify within your own scope of influence and expertise.

Now is the time to assess your resources and personnel strengths. How can you connect with current and potential customers to offer diversified services or new products? Consider extreme cases of companies who have shifted production of perfume to hand sanitizer, or debating about whether they can make respirators instead of electric vehicles. While such extreme turnarounds may not be possible for your business, it’s a good example of how being decisive and taking action can add real value to your market.

Diversification isn’t without its challenges, but creativity and innovation in the face of extreme challenges are often rewarded with robust revenue streams.


Medical providers, whether from a small practice or a large hospital, understand that negotiating with their customers is one of the surest ways to receive payment. In just the last few weeks I’ve seen bills drop from 50-70% of their original value, as providers attempt to work with patients.

If you have outstanding invoices that you fear may go unpaid during a drawn-out pandemic, take action now to work with your customers and negotiate rates they can more readily afford. Or consider negotiating new costs for services and products to entice customers.

You should also examine the accounts payable side of your business. What creditors and vendors can you negotiate with to help ease the burden? Are you willing to make smaller payments at a higher interest rate, or guarantee additional work down the road in exchange for delayed payment now? The old adage is still true today: ‘you never know until you ask.’ As with all financial advice, however, the time to act is now, not when things grow more critical.

Borrow for a rainy day

Taking a loan during times of crisis can often mean the difference between staying afloat or shuttering your doors. If you’re borrowing with the purpose of creating a bridge to better economic opportunities, a loan can be the perfect solution to keeping the lights on while you spend time focused on the business.

Medical providers understand the value of loans, as most of their patients require financial assistance to cover needed procedures or chronic healthcare. An influx of cash now to cover looming expenses or to shift your business into higher production levels can be easily paid back over time, with the right loan.

Experts warn that you should keep at least one to three months of cash to cover immediate expenses and salaries. Whether you have that kind of cash on hand now or not, this is the time to explore options for loans that offer fair borrowing features including low- or zero-interest options and flexible repayment plans, especially deferred payment options.

Various country governments may also step in to offer support to businesses, such as China who set aside more than $100 billion USD to support small and medium-sized businesses with short term loans. As of the writing of this article, the US government is still hammering out a support bill, but there is a myriad of options to consider. The reality however is that government assistance will not save most businesses.

Short term loans and aid package options are not ideal, and may be slow in coming. Short term loans, for example, require repayment over a brief period of time. How can most companies manage to pay back a loan quickly, when business is down 50-80%?

The reality is that getting your business up to full speed will take a much longer time than the period you were shut down. Short term loans encourage a high default rate, which is why private loans offer a more realistic buffer to manage the early and ongoing fallout from Covid-19.

Rather than wait for times to get harder, focus on gathering financing options today. Consolidate debt, diversify revenue streams and focus on negotiating expenses and incoming costs. Partner with other businesses and find strength in numbers through economies of scale. Think creatively and be willing to try new things. You may have to run lean until this crisis is over, but the lessons gained in working to keep your doors open and planning for a brighter future will prove invaluable.