While we have yet to see the full picture of the COVID pandemic’s effects, one thing is certain; the pandemic and its effects have had a huge impact on small & medium sized businesses (SMB’s) all across America. Research indicates that the economic-driven effects and social distancing restrictions have had an enormous negative impact on small businesses.
For instance, it is estimated that the number of active small businesses in the United States fell by 22% or 3.3 million from February to April (https://www.nber.org/papers/w27462 ). Any small business owner will appreciate these are tough times for enterprises in any industry.
Common Issues Small Businesses Are Facing:
#1. Access to Capital – Many small businesses are likely to face a strain in their financial capacity. Making payroll, responding to market fluctuations, and maintaining an inventory can be challenging.
#2. Supply and Inventory Shortfalls – With many businesses facing broken supply chains, ensuring you always have an adequate inventory or diversifying the supply chain is challenging and expensive. In some cases, taking such steps is impossible.
#3. Workforce Capacity Issues – Businesses must take extra steps to ensure their workforce can meet their mandate while being protected, which might increase the cost of doing business.
#4. Increase in Facility Clean-Up/Remediation Costs – Businesses also face the need to enhance their customers’ and staff’s protection. In some cases, this means increasing the intensity and frequency of cleaning the business premises. Cleaning any frequently touched surface regularly, whether by your staff and/or visitors, will increase the demand for clean-up and remediation services.
#5. Insurance Coverage Issues – There is a potential that business interruption insurance does not cover some types of business interruptions. In such cases, small business owners have to bear the cost of the interruption.
#6. Changing Market Demand – Restrictions on movement might impede customers from reaching your business. Additionally, there may be hesitation among the public on moving around and close contact, which will cause a decline in demand.
As you can appreciate, there is a huge financial burden occasioned by the recent events. Weathering this storm can be a daunting endeavor for many small businesses. While expenses might remain the same, many small business owners are facing a decline in revenues. In our opinion, a low-rate SBA loan is an excellent remedy if you face such a situation as SBA loans are considered the “gold standard” in small business lending. Why?
The Benefits of An SBA Loan:
- Applicants stand to get long-term relief in the form of 10 – 25 year payback terms
- Funds of $30,000 up to $5,000,000 are available depending on the loan best suited to a business’s situation
- Interest rates ranging from 4.75% – 7.00%*
- Low monthly payments
- No prepayment penalties
- The broad scope for the use of SBA funds
- About 90% of qualified applicants get funded
*Most SBA Loans have variable interest rates that range from (Prime + 1.5% – Prime + 3.75%)
The application process is easy and surprisingly fast with most loans closing in 1 – 4 weeks. You can prequalify without negatively impacting your credit score, and advanced software streamlines the SBA loan application process so small businesses can now apply online.
What can you use the funds for?
- Working Capital
- Debt Restructuring
- Hiring Employees
- Commercial Real Estate Purchases
- Inventory & Operational Expenses
- Purchasing Equipment
- Business Expansion
What types of businesses are eligible?
From a hair salon to an online retailer to an accounting firm—there are many small businesses that are eligible for an SBA Loan and most “for-profit” industries are eligible.
The favorable terms and conditions for business owners can go a long way in ensuring your business stays afloat and weathers the current storm. The flexible loan structure allows business owners to use this ultra-low-cost, long-term financing to reinvigorate their balance sheets by securing fresh working capital or using these low-cost funds to help refinance the higher cost debt presently on their books. For many small business owners, this might be the lifeline their business needs to survive the pandemic.
Don’t let your business miss out on this opportunity or go under without a fight. Just
CLICK HERE to learn more and prequalify right on the spot!