How Small Businesses Can Cope With COVID-19

Money in a Box

It is no secret that small businesses and startups are taking the COVID-19 crisis particularly hard. Having poured money and time towards executing the perfect business plan, many business owners have seen their momentum rudely interrupted and much of their work go out the window. A fair amount of these businesses have already gone under because of circumstances that simply make it impossible to continue functioning on any sort of timeline.

However, there are many other small businesses and startups that can see this crisis through… if they have some extra cash flow. While the government has committed stimulus packages of trillions of dollars to small businesses in particular, most companies need more than what they are likely to receive, especially if social distancing continues longer than we had hoped.

That said, there is a light at the end of the tunnel for small businesses. There are still a wide range of loans available that entrepreneurs may not have had to tap into before. Furthermore, private initiatives are being created specifically to help startups and SMEs out.

Small Business Loans

Excellent entrepreneurs around the country are now looking for a good flexible startup business loan. Even if you have avoided going down this route before, these loans are not a “last resort.” Good credit practices are what get companies where they need to be, after all.

Here are some of the types of small business loans that may help startups cope through and beyond COVID-19.

Small Business Administration (SBA) loans

The Small Business Administration (SBA) is a federal organization that exists to help entrepreneurs and startup owners. The SBA provides no-collateral loans, serving as the guarantor. While there are conditions you have to meet to get an SBA loan in general, the current crisis has led the SBA to loosen some of these qualifying factors.

The SBA is involved in managing the government’s stimulus package, but that does not mean you are limited to the opportunities specified by the bill. The SBA may approve an extra loan for you if necessary to keep your business afloat for the foreseeable future.

Crowdfunded Loans

Companies like Wefunder exist to provide crowdfunded investment opportunities to entrepreneurs. In March, Wefunder announced more loan opportunities for small businesses and startups on friendlier terms, in order to help make it through this crisis.

Wefunder is able to provide loans of between $20,000 and $1 million, and will defer payments until 2021 if necessary. This may be exactly what you need to get your business through the next few months without having to commit to repayments you are not sure you can meet.

Private Loans

If federal loans and crowdfunded loans are not going to suffice for you, private lenders are still providing small business loans. These loans may not be on as friendly terms, but if you go with a reliable and respected lender, you are less likely to be taken advantage of.

Private lenders may be more flexible during the COVID-19 crisis. However, there are some loans available year-round that might just suit your needs.

Peer-to-Peer Lenders

Another interesting loan opportunity is that of peer-to-peer (P2P) lending. P2P platforms connect individual lenders with loanees. These lenders are providing you with money as a personal investment, and are therefore more flexible and may have more potential plans than banks or companies.

Unfortunately, a lot of individual lenders are feeling the crunch themselves, and are less willing than ever to provide risky loans. You can give P2P lending a try, but the best time for it may be after the crisis ends and we have a clearer idea of what is next.

Solutions

Many small businesses and startups are going through a very rocky time at the moment. Some will certainly not make it through the crisis, but will begin to rebuild once this is over. For others, there are a range of solutions available. Finding the ideal offer is going to be difficult, but the goal for now is to survive rather than flourish. A small business loan may just provide the support you need to get there.