The Covid-19 pandemic has affected all parts of the world, and businesses were closed down to curb the disease’s contagion rate. Recently, the business industry has been gradually opened. Here are the loan options that can help you uplift your business during this season.
Refinance Short-Term Debt into Term Loans
This loan service entails taking a new long-term loan, which you use to pay off short-term debts such as merchant cash advance balances, business credit cards, and other business lines of credit. However, acquiring a lender who can agree on refinancing loan terms seems challenging, but this is a loan option that suits the current Covid-19 pandemic condition.
A 401(K) Loan
This is whereby individuals are allowed to borrow, depending on their retirement shares. The respective board, known as the CARES act, has recently authorized to borrow a maximum of $100 000 to facilitate them in the pandemic environment. Besides, this only works if you had already opened an account and registered for your business.
Besides, the CARES act has also authorized the individuals who have accounts with 401(k) loan to acquire the distributions from their accounts without being imposed the standard penalty of 10%. This sounds great! 401(k) loan suits you since it can uplift your business operations.
Unsecured Personal Loan
During these Covid-19 times, many lenders have put on hold, offering loans to small businesses. However, there is still a solution for online lenders. The unsecured personal loan calls for reviewing the financial capabilities of your business and some levels of underwriting. They will also require to peruse your credits as well as your tax returns files to support your business,
This type of loan service authorizes approved loan requests in the shortest time possible. Their interests are relatively low hence affordable. The unsecured personal loan services offer services throughout various online platforms.
Home Equity Line of Credit
It is also known as HELOC. It permits individuals to borrow money in relation to the equity in their homes. The lenders authorize the borrowers to be given between 75% and 80% of what they have in their homes. Conversely, if you purchased your home about five years ago, you are on the safe side since the value in your area has been appreciated.
If you had initially made a down payment of over 25% when you were purchasing your home, you could have equity in your home that can top up your business during this pandemic.
Small Business Administration Loans
This loan option is specifically meant for businesses that cannot source business support from anywhere. The SBA has improved its services following the outbreak of Covid-19. The small business administration loan has improved its lending services and offers its services via a paycheck protection program.
SBA offers extended period capital that can sustain your business during this season and later pay in installments. Besides, it also depends on the loan program you choose during your registration.
Negotiate Terms with Vendors
Any operating business has suppliers who provide both products and services. Since the pandemic has heavily struck all the business fields, everyone understands its effects. Most of the vendors wish to process payments over extended periods following the current situation. Also, the vendors would like to settle the pending payments with discount offers.
Negotiating with your vendors and other suppliers can help you save the money you could have paid them and use it to grow or sustain your business. Remember that this will only work if you have had a long relationship with the vendor/supplier or a major client.
Family and Friends
Asking for money from family and friends is always a fast step when your business staggers. It is also the best option for sourcing money when all other sources have dried up, and you have no alternative. Note that the funds offered by friends and family members are either considered as a direct equity investment or a loan.
Family and friends can rescue your business at large by either offering their support or linking you to church loans to get assistance. This is a better option than help your business sustain the COVID headwinds. The Covid-19has had adverse effects on the world economy. However, the above-discussed loan options can save your business at large.