As we know all too well, the COVID-19 pandemic has had a severe impact on the operations of businesses all over the world – and small business owners are among the hardest hit. With the implementation of social distancing practices and lockdowns still in place, several non-essential businesses have closed their doors indefinitely, with no confirmed reopen date in sight. As a result, house members have even broadened measures to assist small business owners in the form of an extension of the $660 billion Paycheck Protection Program (PPP).
Many small business owners across the United States remain optimistic about their post-pandemic prospects. According to a recent survey, roughly 75% of small business owners shared that if a global pandemic like COVID-19 were to recur, they would be far better prepared to handle it. The same survey found that approximately 52% of participants expect to recover to pre-pandemic profitability within six months or less.
While this sense of optimism is encouraging, the economic consequences accrued by small businesses will be felt for quite some time and many small business owners may be struggling to determine the best course for recovery in a post-pandemic world. With that in mind, what are some of the best resources small business owners can use to ensure this recovery?
One of them is small business loans. With the right credit and capacity for collateral, you and your small business could be eligible for a number of loans that would help in keeping your business afloat during COVID-19 and onward. Bear in mind, however, that securing a loan for a small business isn’t always a straightforward or simple process. Firstly, there are several types of loans to consider: SBA loans, traditional bank loans, merchant cash advances, and lines of credit, to name a few. There are also many elements of your own financial standing that need to be explored, including your credit, your business’ cash flow and revenue, and your assets that you can use as collateral.
To facilitate this process, be sure to research the various types of loans available as well as tips on how to strengthen your application. To boost your chances of success, it’s vital to follow certain steps, including building your credit, applying for the most appropriate loan, and maintaining transparency with lenders.
Of course, this is not to say that acquiring a business loan will guarantee your entrepreneurial success. A business loan does not ameliorate a poor business plan or necessarily foster innovation within the organization. However, business loans can be a much-needed source of funds to facilitate the expansion of business operations, particularly for novice entrepreneurs and small business owners with limited resources.
Taking out a loan is never something to take lightly, as it can have a significant impact on your credit and your overall financial wellbeing. However, given the COVID-19 pandemic’s severe impact on the economic climate, some small business owners may have no choice but to seek out such assistance. In this case, it’s essential to research the various loan types and select the one most compatible with the needs of your business. Once you do, you’ll be able to kick start your business’ post-COVID financial recovery.