The COVID-19 pandemic has brought significant challenges for small and medium-sized businesses, and many have struggled to stay afloat. However, there is hope on the horizon. While some may think that the worst has already hit, the reality is that the worst is yet to come. The coming months and years may continue to present challenges for these businesses, especially those with high levels of debt.
Many small companies are already feeling the stress of their debt and may be headed towards defaulting. This is evidenced by the increasing number of loan loss reserves and charge-offs that banks are reporting. It is clear that the problems are being recognized, and preparations are being made for potential losses.
However, the peak of credit losses has yet to be reached, and it may take another 18 months before this happens. This means that small companies will continue to face challenges and may struggle to stay afloat in the coming months. However, if circumstances remain stable, there is hope that things will level off and begin to improve.
Overall, while the worst may not have hit yet, there is hope on the horizon for small and medium-sized businesses. It is important for these businesses to stay vigilant and to take proactive measures to protect themselves against potential losses. By doing so, they can weather the storm and emerge stronger on the other side.