The coronavirus pandemic is stressful enough, but anxiety can go through the roof when a business doesn’t know how to stay afloat. Perhaps it cannot apply for a business loan since either the banks are either closed or they don’t qualify.
What’s the next best step? First of all, for those reading this, breathe slow and deep. Pause for a moment to call oneself and then proceed to read these ideas:
1. Consider Using Your Real Properties
Now is the best time to put those assets to good use. Businesses can have two options: apply for a loan with them or sell them.
For example, they can secure a title loan in places like Utah. In this process, the vehicle owner can receive an amount equivalent to the equity of the asset. (Some of them may set a maximum amount.)
The lender holds the title of the vehicle, while the applicant can still drive or keep it. As long as the person pays the principal and interest religiously, then their asset is safe from repossession.
Some banks may also offer home equity loans, in which the business owner can receive the value of the property’s equity. Another option is refinancing. It may even allow them to secure a mortgage with a much lower interest rate and more favorable payment terms.
Does the business have idle assets? They can sell them before they continue to depreciate and need maintenance. Today, the Internet is abundant of marketplaces.
2. Explore the Different SBA Programs
The Small Business Administration (SBA) currently offers many programs for a variety of businesses, depending on their needs. For example, the EIDL Loan Advance allows owners to secure a loan of up to $10,000.
With the Paycheck Protection Program, the organization provides incentives to companies that don’t terminate employees within the next eight weeks. Non-bank institutions like PayPal and Intuit are already participating in this plan that grants forgivable loans.
Many states, such as Utah, may also have their own economic development and financial support programs. They usually work with the SBA for their implementation.
3. Invite Investors
Although this needs deep thinking, having more people onboard can benefit the business in many ways:
- Everyone can split the cost of running the business.
- Someone may qualify to apply for a business loan.
- The business can generate more money in the shortest amount of time.
- Two heads are always better than one when it comes to creating business strategies.
- No person bears the burden of a significant income loss.
- They can tap on one another’s market or network.
This setup may become complicated later on, so for those who wish to pursue this, it’s best to get everything in print. Work with a lawyer who can draft a contract stating the rights and limitations of everyone. They may also form themselves into a legitimate entity, whether as a corporation or partnership.
Nobody knows how this pandemic is going to end and when. But regardless of its timeline, business owners will have to do everything they can to survive to feed families, keep employees, and preserve the economy.
Some of them may struggle with securing a conventional business loan today, but there are options. For those who need help in these trying times, may these ideas be helpful.