The “Long COVID” Effects on Business

It goes without saying that COVID was an extremely challenging period. And while the emergence from the depths of lockdowns, facemasks and constant hand sanitizer has brought substantial relief and a new sense of hopefulness to many of us, some small and emerging businesses continue to suffer from longer-term effects.

For example, during the early COVID period, many companies maxed out their lines of credit on the belief that, in uncertain times, cash is king. Little thought was given during those frenetic days to the potential cash-flow impact that the increased cost of debt may have, let alone how that impact would be exacerbated if interest rates rose dramatically and equity valuations dropped.

And what about businesses tied to the commercial real estate market that bet on a return-to-work culture that has yet to materialize? As the most visible effects of COVID subsided, these companies invested around the thesis that traditional office culture would quickly re-emerge, and some now find themselves still waiting for a return on that investment.

When looking at the struggles of today’s small and emerging companies, if you see a surprising amount of drag on a business that is otherwise operationally sound, it may be a form of long-COVID.