The COVID-19 pandemic has abruptly impacted life across the globe. For small business owners, the impacts of the virus and the subsequent shutdowns have been serious—but businesses are proving to be resilient. As a small business owner, you know the value in being nimble, resourceful, and always ready to adapt to new challenges.
Most small business owners are familiar with the pains of cash flow and the need to maintain some rainy-day savings. For many, that rainy-day account has been drained by the pandemic. As you consider how to adapt your business to begin operating in this new environment, you’re likely facing the challenge of needing to do more—with less cash. For restaurants, retail, and service shops, that means adding new safety precautions and limiting the number of guests or clients you can serve.
Needless to say, the need for some extra working capital has never been greater, but the way people are using that capital has changed. Before the coronavirus pandemic, most businesses used loans for expanding their business, covering operating expenses during seasonal revenue declines, or for refinancing purchases made at higher rates. Here are four ways small business owners are using these funds today—consider them for your business.
1. Get financial relief while you adapt your business to meet your customers’ changing needs.
Since small business owners often work with small teams, they are generally very good at fast problem solving. And while many operators have quickly pivoted to new ways of serving customers during the pandemic, without some exta capital, the transition is difficult. For example, one business owner who runs a successful wedding and event planning company, saw an immediate 80% revenue drop due to the pandemic. She was quick to find a new avenue to help her business thrive—virtual events for corporate clients—but she still needed a short-term loan to cover several months of fixed costs. Regardless of how agile you are in finding a new way to run your business, it’s likely you’ll need some short-term financing to get up and running.
2. Purchase equipment to support new, safer business models.
Adapting your business to meet new safety guidelines is critical, but it doesn’t come without a cost. Extra capital will help cover unexpected expenses for safety equipment, like shields, barriers around cashiers, outside dining tables, curbside pickup stations, delivery vehicles, and more. Take one dry cleaning shop owner’s experience for example: He took out an equipment loan to lease three vans for his dry cleaning business and set up a curb-side garment pickup and delivery service. By doing so, he was able to keep his dry cleaning volume up, and deliver on his customers’ new expectations.
3. Change your approach to marketing—get digital.
If you’re making changes to your business to give your customers a better experience, you need to let them know. Get the word out by ramping up your digital marketing. An owner of a children’s apparel company used a short-term loan to create paid ads on social media and search engines to let her current customers know how they could keep shopping. Not only did her loan help her increase her customer reach online, but it allowed her to show her repeat customers what she was doing to keep them healthy.
4. Create a buffer for the unexpected.
Most importantly, business capital options can give you temporary reprieve in challenging times. Many businesses already went through their savings just to make it through the stay-at-home orders. As the crisis continues to unfold, it’s unclear what the future will be—planning and protecting your business should be a top priority. Getting some working capital for cash flow assistance can help you move through unexpected rough spots and keep your business thriving.
Time and time again small business owners prove that they can withstand even the most challenging periods. Right now, as you work hard to reopen and navigate this new environment, having extra capital to execute your new plans is crucial. While exploring lending options might seem overwhelmeing, Beyond Business Capital can help. With fast funding, a range of small business loan options, and a local Business Advocate who will be with you every step of the way, we can help your business get the support it deserves.
