How to Get a Business Loan for Reopening Costs

If your business was shut down due to COVID-19, you might want to consider reopening. It does cost money to reopen so you might want to consider a business loan for economic recovery. Even if you’ve already reopened your business, a pandemic recovery loan can help you pay off your debt, hire employees, renovate your facility, or implement safety measures.

Understand the Financial Impact of COVID-19

Before you apply for a pandemic recovery assistance program or loan, review the following information of your business:

  • Profit and loss
  • Revenue now vs previous years
  • Cash flow
  • How COVID-19 has impacted your industry

Once you look closer into your finances and the pandemic, you’ll have a better idea of how much capital you’ll need to reopen successfully.

Business Loan Programs

There are several types of recovery loans for small business owners. Make sure that you familiarize yourself with all your relief program options so you can make the right decisions for your business and reopening needs.

SBA Economic Injury Disaster Loan

The SBA Economic Injury Disaster Loan offers up to $2 million. You’ll pay back the loan with a 3.75% interest rate if you’re a for-profit and 2.75% interest rate if you’re a non-profit. Loan terms go up to 30 years and you don’t have to worry about any upfront fees or prepayment penalties.

SBA Paycheck Protection Program

The Paycheck Protection Program is designed to help small businesses cover the costs of payroll, mortgage or rent, utilities, and some debt obligations. This program may be a good choice if you need funds to hire new employees or pay for your commercial property.

Line of Credit

Business lines of credit can be very useful if you’re seeking funds to reopen your business. They work a lot like a credit card and allow you to borrow as much or as little as you’d like up to a set credit limit. If you’re unsure of how much you’ll need to cover your reopening expenses, a business line of credit may be the way to go.

Merchant Cash Advance

With a merchant cash advance, you’ll receive a loan in exchange for a percentage of your income, typically credit card transactions. As you generate credit card sales, you’ll repay the loan automatically on a daily basis with a factor rate, which is a lot like interest.

Business Credit Card

If you don’t need too much money, a business credit card is the way to go. As you make full payments in time, you will build your credit and earn credit card rewards like cash back and points for travel.

Common Uses for Pandemic Recovery Loans

Safety measures

Depending on the nature of your business, there are certain safety measures you may want to put in place to ensure employees and customers feel comfortable on your premises.


The unfortunate reality is that your customers may not be as loyal as they were before COVID-19. Therefore, you may need to increase or enhance your marketing efforts.

Employee Modifications

Whether you hire new employees or bring back former ones, it’s important to accommodate their new needs and desires. If you allow them to work from home a few days a week, for example, you may have to invest in certain technology or work at home tools. You might also purchase a larger space to ensure your employees are well spread out.