As time goes by, the COVID-19 pandemic has become an existential threat to the business industry. With almost every country in the world under restrictions, the pandemic’s effects are tearing the business community apart. Lacking the financial muscle that big businesses have, small businesses have fallen like a pile of dominoes — bearing the biggest brunt of it all.
We all hear it in the news; even small business owners, hoping perhaps for some consolation of their ill fate, have posted their untimely decisions of calling it quits on social media. With more than 100,000 small businesses permanently closed since the beginning of March, the precipitous fall is alarming. Still, many people are willing to take up the challenge and start their business.
If that braveheart is you, then we salute you. These days are certainly not the time for the fainthearted. Quite frankly, you’d have to move mountains to start your business today. And one of the biggest of these challenges is raising capital. Think about it. If finding funding is an uphill climb before the pandemic, today, that slope has gone even steeper.
Then again, there are ways. Starting or reviving a business amidst the pandemic is hard, but we didn’t say it’s not possible. If you’ve done your due diligence, then you should not be denied. Let us show some of the most fundamental ways you can get your sought-after funding the right way. And make a name thereafter.
Attract Investors for Your Business
First and foremost, your company should fit for venture capital. That’s telling you this kind of funding needs a business with a high potential to grow, a capital amount, and a widely addressable market.
And if your business fits right in the qualifications, you should find a good partner to pair up with. If you’re not convinced, then take some time to consider. You’re actually in good company. Venture capital or VC has been exploited to the utmost by some of the biggest names in tech.
Who knows? Your idea can catch some of these investors.
Of course, their names should ring a bell. We’re talking about Google, Amazon, and Microsoft, to name a few — quite literally the behemoths of the industry today.
Also, remember to take time to find the right partner. Why? Because you have to give your partner partial ownership of your company. Make sure you have the same goals and interests to not cause any future problems from happening.
Consider a Private Loan or a Personal Loan
Another funding option to consider is getting a private loan. This means you have to convince your bank to secure a business line of credit. On the downside, many small businesses are still uncertain because of the cost of borrowing. The good news is, the government, along with many lenders, are offering PPP loans that can be accessed.
You can also have Kiva as your private lender, and they can lend up to 15,000 dollars with 0% interest for 3 months. This way, you can still give a paycheck to your employees while maintaining your business.
Small Business Administration Loan
Taking out a loan from small business administration loan lenders is another good option. This mode has always been attractive because it prioritizes small businesses, but it also gives low-interest rates. On top of that, the requirements are much more relaxed than the other options on the table.
Although SBA is seen as a government loan, government entities are not the ones issuing the fund. It is approved by financial organizations like traditional banks that are lending you money.
A good credit should boost your approval in the application process, which could take up to two to three months to be approved. Qualifying for this loan means that your business is guaranteed because it is one of the best funding options you can acquire.
Ask Help from Your Insurer
These days, many business owners are asking their insurers to compensate for their company. If your business has any coverage or business interruption insurance, then you can claim compensation.
This is because business interruption insurance covers up any damage to your premises and equipment. Although it is not clearly stated that a pandemic is included as a disaster, you can always ask your insurer for clarifications.
However, a key person or coverage insurance can be able to lend you a replacement salary. This is for you or any of your management who cannot work due to the coronavirus pandemic.
Let Your Family and Friends Fund Your Business
Asking for help to get a temporary loan for your business through your family and friends is a common way to fund your small business. You should explore it.
The upside is you can always agree on payment terms when you take out a loan from someone close to you. Going to your loved ones who have extra money to fund your business can be of great help. Additionally, you can also establish a partnership with your inner circle. It’s a win-win situation you should explore. After all, when you’re swimming in success, everyone close to you will be happy they’ve pitched in. By that time, you are in a better position to return the favor. And you should.