Since the financial crash of 2008, traditional banks have become much more conservative with their lending options. In many cases, startups and small businesses may struggle to get approved for a loan, making it difficult to get up and running. Fortunately, alternative lenders have swooped in to pick up the slack.

In this article, we are going to look at the current state of alternative lending. We will discuss why it has become vital and where the industry is headed for the future.

What is Alternative Lending?

Basically, any lender that exists outside of the traditional bank structure can be considered “alternative.” One of the benefits of working with a bank is that the federal government secures the loan, and banks are regulated by the Securities and Exchange Commission (SEC).

Because alternative lenders work outside of this bubble, they have much more flexibility regarding who they can finance and how much they can lend. In many instances, startups and small businesses that would get declined at a bank may find luck with alternative lenders.

Some examples of alternative lending can include:

-Hard Money Loans.

Usually, these loans are financed by an independent party who looks at the value of a specific project. For example, a lender may help fund the purchase of real estate, using the property as collateral if the borrower can’t pay the loan.

-Factoring.

Rather than borrowing money from a bank, a company can leverage outstanding invoice balances. Since clients are the ones on the hook for payment, businesses don’t need a strong credit history, nor do they have to pay anything back.

-Equipment Financing.

When a company needs high-end equipment or machinery, an alternative lender can use the item as collateral to fund the loan.

Overall, alternative lenders offer many different solutions for borrowers. In most cases, the approval process is much faster, with some lenders offering same-day payments. Because of the versatility of alternative lending, more and more business owners utilize this tactic instead of going to a bank.

By the Numbers: How Businesses are Utilizing Alternative Lending Resources

Back in 2019, a survey done by Dun and Bradstreet and Pepperdine University illustrated how much alternative lending has grown in recent years. While the current pandemic is affecting the industry across the board, this data shows that more companies are turning to alternative lenders for financing. Here are some of the details from that report.

-Forty-one percent of businesses reported that they sought a traditional bank loan. In quarter one (Q1) of 2019, that number was 49 percent.

-Of those who applied for a bank loan, only 32 percent of small businesses (less than $5 million in sales) were approved. By comparison, only 89 percent of mid-sized companies (sales between five and $100 million) were approved. Both of these numbers showed a decrease from the previous quarter.

-When accounting for alternative lending resources, 53 percent of companies applied for a business credit card, 20 percent turned to crowdfunding, 29 percent worked with online lenders and 15 percent utilized factoring services.

Why Are Businesses Turning to Alternative Lenders?

Although the data shows that companies are seeking alternative lending sources, it doesn’t offer insight into why. Here are some of the most compelling reasons why alternative lenders are becoming the norm.

-Fast Financing.

Typically, it can take between 30 to 60 days to get funding through a traditional bank. In some cases, companies can get cash within a day or so from alternative lenders.

-Flexible Borrowing Options.

If a company only needs to borrow a small amount, most banks or credit unions will decline it. Alternative lenders allow business owners to borrow as much or as little as they need with microloans.

-No Credit History Required.

Usually, startups have the hardest time securing a loan from a bank, since they don’t have a credit score. Alternative lenders can provide financing when other institutions can’t or won’t.

How COVID-19 is Affecting Business Lending

Because of the current pandemic, many small businesses are struggling to maintain a positive cash flow. While it’s still unclear what the long-term ramifications of COVID-19 will be on the economy, it will likely boost alternative lending even further.

A significant reason why the shift will only continue during and after the pandemic is risk assessment. Large banks and institutions will tighten their lending processes even further to mitigate any potential losses. As that happens, companies will have to turn to alternative resources to help cover expenses. Because alternative lenders already have more flexibility and are more willing to accept risk, they’ll be able to maneuver throughout the pandemic and its aftermath.

We would not be surprised if the pandemic creates a sharp uptick in alternative lending. Although government funding programs are helping to bridge the gap, banks will likely be wary of small business financing for the foreseeable future. If these companies want to survive, they’ll have to get creative.

Contact Us Today

If you’re interested in obtaining alternative financing, we can help. We have a vast network of brokers and lenders that can help your business stay afloat now and into the future. Visit us online or give us a call to find out more.

Choose the Right Type of Loan for the Job 

You may think that getting a loan is nothing more than asking for money and agreeing to pay it back for a certain amount each month. However, there is much more to it than this. Depending on what your needs are, the type of loan you need may vary, and each type of SBA loan carries different obligations with it. 

SBA Real Estate Loan 

An SBA Real Estate Loan can provide you with up to 90 percent of the money you need to buy or expand your space, with a low down payment and a sensible repayment plan. Usually, you have to meet certain requirements, including having a sufficient amount of equity and have already exhausted your existing resources. However, if you meet these conditions, a sensible, easy-to-manage loan is just an application away. Yes, it’s a detailed application with a thorough review process, but for those who qualify, this can be an excellent option. 

SBA Equipment Loan 

An SBA 504 loan is ideal if you need to purchase equipment. This type of loan is perfect for the owner who is looking to obtain funding for the various machines and pieces of equipment that are necessary for the day-to-day operations of the business. Even if you have been denied funding from other sources, an SBA 504 loan is still obtainable, with a low APR and manageable payment options. 

Interest-Only Hard Money Loans 

If you need capital to keep you afloat now, but you are anticipating a large payoff within one to three years, then a bridge loan, otherwise known as a hard money loan, might be a way to access funds and move on your deal while maintaining liquidity in the short term. These loans usually only require you to make payments on the interest during the life of the loan, with a large balloon payment at the end.  

Construction Loans 

Many lenders are uncomfortable with providing long-term loans during the risky building construction phase of a project when so much can go wrong. Construction loans are short-term loans that fill this gap until the project is complete and are a less risky funding opportunity for lenders. Construction loans are great because you are not required to borrow the full amount of the loan right away. Instead, these loans often allow you to take the money you need when you need it at specified completion milestones along the life of the project. So, you will only end up paying on the money that you have actually borrowed, which can help keep your terms and payments down. 

Keep Your Credit Risk Low 

One of the fundamental truths of credit is that the lower the loan risk, the lower your payments will be. Lenders do not always like to lend money to high-risk clients, and this wariness manifests itself in the form of higher rates and payments. Avoid these problems by keeping your risk profile low by building a strong, reliable history of repaying loans on time and keeping a positive cash flow in your books, which will show the lender that you will always have the finances you need to make your payments. 

It is a widely known and accepted rule of business that interest rates change. As the economy changes, the rates you might be offered will change to reflect that. The good news is that right now, due to the economic uncertainty we find ourselves in, we are seeing some of the lowest rates ever. As a business owner, it is up to you to take advantage of the opportunities the low-interest rates bring you. Getting and securing a loan now, with these historically low rates, means that you could end up saving yourself thousands of dollars, over the life of your loans. 
 
If you need funding to take your business to the next level, let AFP help. We are ready to listen to you, assess your situation and match you with the right lending company that can give you the financial opportunity you need to succeed. Contact us today! 

Thankfully, you have options for freeing up funds for your business through alternative means. During this trying time, a traditional loan will likely be too slow and costly over the long term. Fortunately, there are plenty of other ways to tap into financial resources that can keep your business running smoothly.

Alternative Lending Resources for Freeing up Fast Cash

Equipment Lease Buyback

If you own equipment or machinery to run your operations, you can leverage their value for quick financing. A lease buyback is a relatively simple process that comes with multiple benefits, both in the short and long-term. Here’s how it works.

First, you need to contact a leasing company that will purchase the equipment from you. Company vehicles can also be used for this kind of transaction if you manage a fleet. Once the leasing agent takes ownership of the equipment and you get paid, set up a lease agreement. Since you are using the same machinery, you will not have to disrupt your operations to take advantage of a buyback.

Entering into a lease agreement is beneficial because it removes your responsibility for maintaining and repairing the equipment. If the equipment breaks down, the leasing company has to handle it, not you. Another advantage is that you can upgrade to a newer model once the lease expires. Since you will not have to pay for a whole new machine, you will be able to improve your operational efficiency without cumbersome expenses.

Invoice Factoring

You may not be able to wait for clients to pay outstanding invoices to help you manage your cash flow. This problem can be even worse if you offer extended payment terms, such as 60 or 90 days, or even longer.

Thankfully, you can get that cash much faster by working with a factoring company. The factoring process works by delivering a majority of the invoice payment upfront, with the remainder coming in after the client pays. In most cases, you can immediately access up to 80 percent, which can help smooth out any cash flow problems. The factoring company charges a fee from the remaining balance, and you will get the rest.

Another advantage of factoring is that your credit score or payment history does not matter. Instead, only your clients’ credit scores matter to the factoring company. So, if you have a new business or are worried about a credit check, this option is usually ideal.

Purchase Orders and Contract Financing

Typically, factoring is designed to access funds from outstanding invoices. However, you can also use it to get quick cash from purchase orders or long-term contracts. As soon as the order comes in, you can set up a factoring account. This process provides much-needed flexibility for your business, as you can get financing at any point during the life cycle of a contract.

Asset-Based Lending

If your company is suffering from a stagnant cash flow because your equity is tied into fixed assets, you can tap into that equity with asset-based loans. Here are a couple of examples of alternative lending options you can utilize.

Property Loans

Owning commercial real estate can be a sound investment, particularly if you own the buildings from which you operate your business. Property-based loans will deliver a portion of the equity tied to the property, even if you do not hold the deed yet. In most cases, you can get up to 70 percent of the capital, which can provide financial stability to help you stay afloat during uncertain times.

Inventory Loans

This pandemic has forced many retailers to shut down. So, they are sitting on inventory with reduced means to sell. While online shopping can be a viable placeholder, it might not replace all of your sales.

Another options is to borrow against the value of your inventory. These loans are set up to take a portion of future sales, making them less intrusive than other forms of business lending. If you go this route, you will have to provide a reopening strategy to illustrate how you plan to sell these items in the coming weeks and months.

Lines of Credit

During this uncertain time, taking out a traditional business loan may be a mistake because you could borrow too much and get locked into an extended repayment plan that no longer works for your business. Instead, opening a line of credit may be a better option.

Credit lines can be secured or unsecured, depending on the strength of your business. Secured lines require some form of collateral, but you can get a higher balance. Unsecured credit can get approved faster, but it can be challenging to qualify.

Another option is a working capital credit line, which works similarly to a credit card. This option provides ongoing flexibility for your business, as you borrow only what you need and pay it off as you go.

Contact Us Today

Getting your business back on track is going to take hard work and creativity. If you are interested in freeing up cash, contact us today. Working with a licensed commercial loan broker is the best way to find the right financing options for your brand. We have a vast network of lending partners, and we can negotiate favorable terms. See what we can do for you today.

Yale

Yale is one of the most prestigious universities in the United States, and they offer free access to financial case studies online. Run by their International Center for Finance, their website provides professional and academic support for financial economics research. There is a wide variety of interesting and useful topics that are studied, such as the future of malls, the future of newspapers, factor investing for retirement and much more. Access to these case studies and other financial research resources can be found .

MIT Sloan School of Management

The MIT Sloan School of Management has some of the most selective degree programs in the world, and they offer free access to financial case studies online. These studies are posted using the LearningEdge platform, and there are also management simulation games that are incredibly valuable training tools for business owners and managers alike. Their case studies cover a wide range of topics such as accounting and finance, entrepreneurship, leadership and ethics, strategy, operations management, system dynamics, and sustainability. Many of these case studies highlight the decision-making process that goes into owning or managing a business. Access to these case studies and other financial research resources can be found here.

Acadia University

Acadia University is a public university in Nova Scotia, and they offer free access to financial case studies online. The website is down, but you can still access historical records on the web archive. The Acadia Institute of Case Studies is a non-profit center that develops these case studies to provide resource materials for students and educators. They offer case studies for a wide range of topics such as women in business, youth entrepreneurship, e-business, accounting and finance, economic development and much more. Some of the most interesting examples on the website include project evaluations as well as process documentation of how certain businesses developed their plan to overcame financial obstacles. Access to these case studies and other financial research resources can be found here.

Harvard

Harvard University is a private Ivy League research university, and they offer premium financial case studies at a high cost. Their archive contains thousands of case studies that contain an extensive amount of valuable information. If you’re willing to invest additional money into obtaining knowledge about financial decision making and business operations, then this is one of the best resources. They offer case study startup kits, curriculum maps, books, and partner collections. Some of the most interesting topics include the future of remote work, the role of platform design, the ethical challenges of a family startup business, and much more. Access to these case studies and other financial research resources can be found here.

Browsing Tips

Searching through hundreds of case studies to find specific information can be tedious. Fortunately, these websites are well designed and organized so that you can easily find the information that you’re looking for. Always check the date of the case study that you’re reading, because information may have been relevant in a previous period but be out of date today. Try to find the most important facts and information from each case study, then compare and contrast them with one another. Combining knowledge from multiple case studies is an excellent way to develop insight that you can transfer to your own business strategy and tactics.

An effective method of absorbing information and diving deeper into case studies is to read the study three times. The first reading should be a quick skim through to understand what the study is about and the data that is used. The second reading should be a careful examination of the exhibits in the case to better understand how to evaluate the situation. The third reading should be focused on understanding the root problems presented in the study while coming up with your own recommendations for solving them. Using this method may not be necessary for everyone, but it’s a useful tool to get the most out of a case study that is relevant to your field.

Contact Us for All of Your Commercial Financing

Case studies are a powerful tool for many leaders. At Alternative Funding Partners, our brokers and extensive network of lenders have years of experience in the field and can provide you feedback on your financing plan, including relevant examples to help you identify risks and opportunities in your growth and financing plan. We partner with lenders nationwide to provide access to capital when it’s unavailable through traditional means. We work directly with companies to provide guidance, assurance and direct access to reputable sources of funds. Visit us online or give us a call to start a conversation.

Investment Opportunity

Commercial real estate is an investment opportunity for owner occupied buildings. When you own the building you operate your business in, you are making your payments. Owner occupied buildings are eligible to receive a Small Business Administration loan, also known as an SBA 504. This will further boost your abilities to jump-start your business and work towards your goals. Another benefit to this is that the maintenance costs are tax-deductible, which can save you money.

Time Requirements

There are certain time requirements for seeking long-term commercial real estate financing. The first step is finding a loan broker that is not only reputable, but can fit the specific needs of your business. They will take time out to evaluate your loan requirements and decide if they want to move forward before you apply and start getting dings to your credit rating as potential lenders pull your credit rating. You may have to be in contact with multiple loan brokers before you find the right fit. Once you find a loan broker that is willing to work with you, they will need time to find a source to provide you with the loan. The time that this will take will depend on the amount of the loan that you need, your credit score and the industry that you’re interested in making your way into. However, there is a way to speed up this process through an alternative method.

Bridge Loans

Bridge loans can provide you with an opportunity to close on a loan quickly if you’re confident that long-term financing will close after the waiting period. A bridge loan is a short-term loan that is designed to provide you with the financing that you require while waiting for a long-term loan. These loans will help you bridge the gap during the waiting period, and allow you to take possession of your new building as soon as possible. Bridge loans will typically have higher interest rates due to the higher risk that is involved.

Benefits of a Loan Broker

There are several benefits of working with a loan broker to fund your commercial real estate acquisition.

• They understand profit and loss reports: A profit and loss report shows your total income and total expenses over a certain period of time. These can be difficult to evaluate, and a loan broker can explain aspects of the report that you may have missed. You can take advantage of the knowledge that they provide you about these reports to cut costs and run your business in a more cost-efficient manner.
• Matching to the right lenders: A loan broker can match you to the right lenders that know your sector. Working with a lender that isn’t familiar with your sector can be a hassle and may require additional effort. Being matched with a lender that knows the ins and outs of your industry, as well as what it takes to succeed can provide you with massive benefits.
• They can suggest opportunities: A loan broker can suggest prime opportunities so that you can get the most out of your real estate acquisition. They can also assist you in finding more funding when the time comes for you to expand your business.

Choosing a Loan Broker

There are several considerations that you should keep in mind when deciding on a loan broker. A loan broker that specializes in finding loans for business owners that work in your industry will be much more suitable than a loan broker that works in a different industry. They will have existing connections to lenders, and this will speed up the process of securing a loan. Compare the fees of each loan broker that you’re considering. While you may think it will be in your best interest to choose the least expensive loan broker, consider their reputation in the industry as well as the time that they estimate for the loan to be received. Lowest cost = lowest consideration. And, check online reviews to learn about other borrower experiences.

Contact Us About Securing Your Commercial Loan

If you’re ready to expand your business through a commercial real estate loan, talk with our loan brokers today. We partner with lenders nationwide to provide access to capital when it’s unavailable through traditional means. We work directly with business owners to provide guidance, to position businesses for borrowing, and to source access to reputable lenders. Visit our profile and reach out to us to start a conversation!

All too often, entrepreneurs believe that the only way to get financing for their business is to go to a bank or credit union and take out a loan. While this option does have some benefits, it’s not always the right choice. Many banks have stringent lending requirements that restrict borrower’s ability to access funds, and some loans can take up to 45 days or longer to fund, slowing your ability to conduct business.

In this article, we will discuss alternative lending resources that you may not know about to show how you can get the funds you need in a timely manner to take that next step in your operations.  

Step One: Identify Your Objectives and Requirements

Determine the specific uses of funds. Let’s break down some of the most common reasons to borrow.

Cash Flow – Ideally, your business will have cash coming in that can cover expenses and add to savings. Many businesses need to build up stock at the same period that they have the least sales during the year. Accessing funds to apply to open-to-buy dollars or to pay invoices during a sale cycle is common in many retail related industries.

Expansion – If your business is doing well enough to upgrade to a new location, you have a choice to purchase an existing property, build a new property or rent and share tenant improvement costs with the building owner.

Equipment Purchases – While revenue can cover utilities and other expenses, you may not have sufficient funds to buy new or upgraded equipment or machinery.

Once you have a specific reason, you can look at various types of financing. As we’ll discuss, you can usually get funding for a particular need, all without having to wait for lenders or financial institutions.

Step Two: How Soon Do You Need Money?

SBA loans may have some of the best interest rates, but their time to close is more than a month. There are other options to access funds more quickly when business is operating at a clip. A loan broker can help you choose rates and lenders to get the right mix of speed and interest rate for your operation.

Step Three: Work with a Commercial Loan Broker

If you’re not sure how to get financing for a specific need, it can seem a bit overwhelming to find the right information. You’re busy running your business – let someone else handle the details.

Commercial loan brokers can alleviate the pressure of borrowing because they know the industry, and they have relationships with lenders.

Overall, using a broker can provide peace of mind, and you can get access to funding options you may not have considered. Here are a few of the methods that can help your business.

Equipment Loans

Rather than taking out a hefty loan and using it to buy gear outright, you can borrow against the equipment itself. While these loans don’t cover the full amount – typically, it’s 80 percent – they are much more flexible.

Factoring

When it comes to cash flow, sometimes the problem lies in your accounts receivable. If clients are taking too long to pay invoices, you can outsource collection to a factoring company. These businesses will pay you upfront and then work with the client directly to get the balance. Once the client pays, you get the remainder, minus the factoring fee.

Construction Loans

In most cases, the expansion of your business will be moving to a bigger or better facility. However, if you want to have total control over the building, you need to work with developers and investors. Construction loans enable you to break ground without having to borrow vast amounts. These loans are also structured to pay out based on milestones, thus protecting both you and the lender.

Bridge Loans

Sometimes, you need money to make a deal, but you don’t have enough cash on hand. A bridge loan is fast financing that you can use to pay for significant investments that will yield a hefty return. Bridge loans are typically for one year, and they do have high interest rates, but they move a lot faster than traditional business loans.

Lines of Credit

If your company has a good credit history, then your best option may be to get a line of credit instead of a loan. This way, you can borrow as necessary and pay it back as you go.

You need to be smart about financing your business. We specialize in helping entrepreneurs get the money you need while balancing out interest rates and repayment terms. Call us today to find out how we can assist with your business financing.

Cash Flow 

The amount of income that you or your business is bringing in is a major factor for lenders to determine whether or not to approve your loan application. Lenders will want to have a clear picture of how much money you have to operate your business and to repay your loan. Make sure to provide lenders with detailed information about your profit margins, accounts receivable and the rate at which cash moves through your business. Providing lenders with an income growth history is a great way to show them the success of your business and that you’re currently reaching some of your goals. 

Credit Score 

Lenders may ask you to provide your credit score when deciding on a loan approval, so it’s important to maintain a good credit score. There are several ways that you can positively impact your credit, and increase the chances of receiving a loan. Pay all of your bills on time, because your payment history is a major factor for your credit score. Pay down debt that you may have and make any outstanding payments. Making your phone and utility payments on time will also improve your score. Reducing the balances on your credit card is one of the fastest ways to see improvements. 

Debt to Income Ratio 

Your debt to income ratio is the percentage of your gross monthly income that is used to pay debts. This ratio is based on being able to reasonably repay what you already owe, or owing more than you can reasonably repay. There are several ways that you can improve your debt to income ratio. Expanding your client or customer base will greatly increase your ability to pay debts quicker. Paying down your debt in larger chunks is excellent for reducing the amount of interest you will have to pay in the long term. Avoid taking on any new debt before applying for a loan, because this can negatively impact your ratio. You can also consolidate your debt to a lower interest rate in order to pay it off quicker. 

Collateral 

Another way to provide a lender with more incentives to approve your loan is to offer collateral. A few examples of common types of collateral loans are personal real estate, investment accounts, personal vehicles and jewelry. Having a limited amount of collateral to offer will make it more difficult to leverage a loan and lower your ability to negotiate the loan. You will need to identify if you’re willing to take out a loan against your personal property, and whether or not you will be able to afford it. 

Time in Business 

Some loans require you to be in business for a certain period of time before being able to borrow money. You may have to seek funding through alternative means, especially if you’re running a start-up company with limited experience. Lenders consider newer businesses to present a higher risk towards receiving their money back in time. Alternative financing firms are an excellent resource for newer businesses that have had their traditional loan requests declined. Due to the higher risk for the lender, these loans will often have higher interest rates. 

Business Plan 

When your business lacks a significant history that you can use to convince lenders of your credibility, developing a comprehensive plan with a clear target audience and sales objective can help you overcome obstacles. Detail the steps that you’re going to take to make each payment on time and reach your revenue targets. Craft this plan with confidence and always be realistic with the numbers that you expect. Lenders will see that you’re putting in significant effort towards ensuring the success of your business, and this can increase your chances of loan approval. 

Contact Us Today 

If you’re experiencing trouble with securing your targeted loan, talk with one of our brokers about opportunities for your business. During this time of upheaval, lenders and regulators are examining their guidelines to assist businesses in remaining solvent and moving business ahead. We partner with a nationwide network of lenders to provide access to capital when it’s unavailable through traditional means. We work directly with companies to provide guidance, assurance and direct access to reputable sources of funding. Working with a loan broker will help you evaluate your options and take the necessary steps to fund your loan. Visit us online or give us a call to learn more about our services. 

Finding a Trustworthy Broker: 

Read Independent Review Sites 

Independent review sites are popular for obvious reasons: the reviews are written by customers only, meaning the broker firm cannot influence what is being written about them. If they have mistreated their customers in the past, you are sure to read about it there. From the BBB to Google Reviews, there are numerous ways to check on a loan broker prior to initiating a call. 

Approach the Broker Directly 

After checking out their website and reading reviews, one of your greatest resources is your own intuition. If the broker you are considering is speaking in vague terms, avoiding your questions and trying to fast-talk you into doing what they want, listen to that little voice inside your head that is telling you that this is not a good fit. Since the broker’s office will probably be closed for at least the next month due to continued COVID-19 precautions, and you will have to speak over the phone or screen share, you may lose the in-person advantage of watching their body language. However, there will still be clear indicators if the firm is not legitimate.  

Considerations When Taking out a Loan: 

How Much Money do You Need, and How Much do You Need the Money? 
Before you take out a loan, think about how much you actually need the money. Just because there is a crisis does not mean you have no other options. Does your business work in perishable goods or durable goods? Is your business in manufacturing or information? Can your employees work from home or not? Do you have enough capital to survive? The coronavirus is a single threat, but it affects every business in different ways. Consider, not just current cash, but your estimates for the next three to six months. What is your plan to regain consistent cash flow? Apply funds in the right proportion directly to those activities in order to avoid spending on hope instead of real opportunity. 

What Will you be Able to Pay Back? 

Since ancient times, loans were intended to be repaid with interest. Although recent FED decisions have drastically reduced these interest rates, loans still need to be paid back, and for some companies, that might not be possible. After all, the Small Business Administration’s statistics say that roughly half of all small businesses survive only five years, with or without a national catastrophe, and a small loan might not be able to handle your liabilities. 

What Small Businesses can do to Survive the Coronavirus:  

Furlough Your Workers 

Furloughing employees, even if it is only temporary, is difficult for any business owner. But, it may be for the best if you want them to have jobs to come back to. Laz-Y-Boy just furloughed 6,800 employees, while Cheesecake Factory furloughed about 41,000. 

Have Your Employees Work From Home

If your employees can work from home, even in a minimal way, it is better than nothing. Providing at least a few of the services your company offers shows the public that you are devoted to your workers and customers. See if you can come up with creative ways to continue business during a quarantine to prove that your business is scrappy and innovative.  

Apply for Federal Aid 

There are a number of programs set up for exactly this situation, and now is the time to take advantage of them. One proposal, the “Small Business Workforce Stabilization Fund,” if accepted, would forgive financial aid offered to businesses that were solvent before the crisis, as long as all the employees are rehired within a twelve month period. Other similar proposals and programs are out there, so see if any are right for you.   

Speak With Policymakers 

Local and state officials cannot help you with your specific needs if you do not talk to them, so get in touch with the ones who control public policy and let them know how the coronavirus is impacting you. 
 
Nobody knows how much damage the coronavirus will ultimately do, or how the market will react. Experts are making predictions, but even they are in the dark. What we do know is that if you own a business, you perform a great service to your community, and you need to do everything you can to stay afloat, for yourself and others. So, pay attention to the market, get help if you need it and most importantly, stay safe.    

Talk With Us About Your Loan Application 

If you are applying for a loan talk with your loan broker. We will shop competitive rates and help you get your loan funded so you can get back on the track toward your future. Give us a call and speak with a loan broker today. 

The following are organizations that are working towards ensuring the survival of small business.

Government Financial Support

The U.S. Small Business Administration is offering low-interest federal disaster loans for small businesses that are being impacted by the COVID-19 pandemic. Small business owners in all states are eligible to apply for these loans, which can be used for paying employees, paying fixed debts, accounts payable and any other bills that are unpaid because of the crisis.

An economic injury disaster advance loan is available for small businesses that are experiencing a temporary loss of income. The SBA is also providing debt relief to make it easier for small business owners to overcome the challenges presented by the pandemic.

Facebook Business Grants

Facebook is offering $100 million in cash grants and ad credits for businesses that are experiencing disruptions from the pandemic. This is designed to assist business owners in a variety of ways, including paying rent, keeping the workforce going, connecting with consumers and any costs of operation. These grants will become available for all eligible U.S. cities on April 22. The following are the qualifications for being eligible for a business grant from Facebook.

• Have between two and 50 employees
• For-profit companies
• In business for over a year
• Experiencing challenges from COVID-19
• Near a location where Facebook operates

Google Ad Credits

A Google Ad account that has been activated over the past year should receive a notification about free ad credits that can be used at any point throughout 2020. Google is offering $340 million for small and medium businesses worldwide to help them stay in touch with their consumers during this challenging time. These ad credits are only available for small and medium sized businesses that advertise directly with Google or their partners that have managed accounts since the start of 2019.

Google Training

Google training is an excellent tool for small business owners that are looking to enhance their marketing knowledge and abilities. All of these courses are available online, so this tool can be utilized to learn while still practicing social distancing.

Google is also offering resources for workers that are forced to work remotely. Working from home can be a difficult transition for people in many different industries. Their guides will provide you with tips to communicate and collaborate with coworkers remotely, as well as how to stay productive. Running a business remotely can also present a wide variety of hardships that can be difficult to overcome. Their guides can help you keep consumers informed and brainstorm ideas with your team.

Mailchimp Business Support Fund

Mailchimp has announced that they are giving $10 million of their services to small businesses that have been impacted by the pandemic. Their primary goal as a company is to empower these businesses and help them maintain their health online. Their current customers that have 25 or fewer employees in a variety of industries are eligible for three free months of their services.

Mailchimp is also investing $100 million of price discounts, add-ons, product upgrades and more to help these businesses.

Mainstreet.org resources

Main Street America is compiling their resources and opportunities to assist Main Street districts during the crisis. They are providing information online about federal guidelines, support programs and resources for small businesses. These resources include tips for avoiding the spread of the virus, common issues that are associated with the virus, receiving emergency assistance and much more. Navigating through federal documents can become overwhelming and difficult to understand, and their services can guide you through this.

In response to the COVID-19 pandemic, our loan brokers are working with businesses remotely. The United States has seen an increase in the number of loan applications from businesses that are being impacted by this pandemic. Some businesses in critical categories need more operating cash for supplies, equipment leasing and more, while others need to free up cash to meet current obligations, acquire stock or to otherwise be ready to reopen strong. To make the right choices it is helpful to work with our brokers to discover the best avenues for financing. Our insights and advice are free to help you understand your options and the various options for funding your loan.

Small businesses across the world are experiencing difficulties sustaining the health of their businesses by being forced to shut down. The situation can continue to improve for small businesses as more organizations provide funding and services to make up for the economic downturn. 

2020 began quietly for many businesses. There was but talk of a recession that was projected based on past patterns, but not current evidence. That said, growth seemed to be continuing based on a resilient economy without the slightest hint that a global pandemic would test our collective resilience and resolve.

Covid-19 and coronavirus have created states of emergency in major cities and in states around the country, and that changes the circumstances and available funds to businesses in many areas affected by the virus.

Federal disaster loans for working capital are being made available to small businesses in certain states that are suffering substantial economic loss as a result of the COVID-19 coronavirus. Disaster loan applications must be submitted by December 21, 2020 according to a statement released by SBA administrator Jovita Carranza:

“Small businesses, private non-profit organizations of any size, small agricultural cooperatives and small aquaculture enterprises that have been financially impacted as a direct result of the Coronavirus (COVID-19) since Jan. 31, 2020, may qualify for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.”

Loans may be applied to make payments on operational costs such as accounts payable, payroll, rent and similar costs.

Talk with a loan broker today about your eligibility. Your broker can also help you to submit your application for funding and maximize your chances for approval. Our team stands ready to help your company keep cashflow balanced and your doors open during this challenging time.