Since the outbreak of covid-19, it has been a volatile period for most businesses trying to rise through new financial difficulties in line with their operations. It doesn’t matter if your business is a startup or in developmental stages, but all entities have been hit hard financially by a coronavirus, many struggling to keep their operations live while others are closing up. Understandably, according to a survey during this period, 90 percent of businesses and firms have been facing cash flow and liquidity hurdles. We can’t deny that financing a business during these hard times of Covid-19 is a challenge. Conversely, according to business practitioners, use the hacks listed below to boost your business financially.
1. Credit Cards Financing
In the recent past, credit cards have taken useful positions in financing businesses. In fact, credit cards are ranked third most renowned source of cash for businesses right after business revenue itself and loans. If your business card is well developed, it entails high loan eligibility through skirting bureaucratic paperwork associated with obtaining loans from financial help entities. However, while financing your business with a credit card, it’s not advisable to rush for one but take your time to compare the best card. It’s good to go with a financial institution you already have a banking relationship and trustable creditworthiness.
Perhaps the most convenient way to finance your business during this covid-19 era is through personal savings. It’s no secret that the popular source of financing in most businesses is savings from the business founder. However, while most people rush to use their personal savings to boost their businesses, very few will mind the most important aspect: which is the most appropriate amount to source from savings into a business’s running. The most beneficial aspect about investing your personal savings into business is that there is no cost apart from lost opportunity to scoop interest, but it’s good to consider the risk of what if things go wrong.
3. SBA Microloan Program
If you are in dire need to finance your business, you may be eligible for the SBA microloan program. Microloan program finances a loan cap up to $50,000 for small businesses. SBA microloan program is an ideal business financing initiative during Covid-19, aiming at entrepreneurs who need technical and monetary assistance to operate their businesses. It doesn’t matter whether your business is months old, but you only need to come to the table with your sales projections, business plan, and all things you need to attest to your business success.
4. Friends and Family Members
Asking friends and family members to help your business during Covid-19 financially is a common source of money if independent investors or banks might not be ready to risk money on you. However, those who believe in you might take this chance to get your business off the ground with financing. Besides, friends and family members who make equity of investment into your business are highly likely to advise you on how best to run the business, whether you like it or not.
5. Business Loans
During these hard times of Covid-19, business loans could mean a difference between failure and success. Applying for a business loan could affect not only your business but also those who surround you. That’s why most ventures today are operating with loan management software for maximum success results. During Covid-19, business loans help capitalize on opportunities, take care of necessary expenses such as rent and wages and enhance profitability.
If your business is less than three years old, most financial institutions would not consider helping your business financially despite the Covid-19 impact. Occasionally, with the current economic climate, most banking institutions consider this as too much risk because your business doesn’t have a built-up creditworthiness history. However, if you are conversant with factoring, this is an innovative way to access your business accounts in accounts receivable. To apply for factoring funding, you are only required to fill a simple form, and once your accounts receivable are in good standing, then shall process your loan within 48 hours.
7. Angel Investors
Despite angel investors sounds like they are sent from heaven, for them to finance your business, you don’t require a miracle to get them. You need to critically utilize your networks to find deep-pocketed investors to facilitate your company’s growth. To win potential angel investors, think critically about pitching your business operations and how large stake returns they can get from the business.
Running a business during this unprecedented period of Covid-19 is daunting, but rewarding through perseverance. However, to succeed through this period, sufficient financing is one of the most critical elements. Despite financing a business can be a hilarious, drawn-out process, explore different forms of financing today and shape the financial future of your business.