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Due to COVID-19, many small business owners have been financially struggling leaving many people needing to rebuild their business. It is important to consider what you need to do to recover your business once the economy returns to normalcy. Having a strategy will prepare you to rebuild and get your business back on track. In this article we will discuss some tips to start rebuilding with the financing options available as well as other factors to consider when rebuilding.
Business Line of Credit
With a business line of credit you can use the cash whenever you want, pay the portion back, and get access to the full line of credit again. The great thing about a business line of credit is that you only pay interest on the funds you use, not the entire line of credit.
A business line of credit will help you to finance whatever your business needs are such as making payroll, paying bill, restocking inventory and much more.
Short Term Loan
If you are looking to get funding quickly, short-term loans are the best option since you will often get the funds you need in as little as one day. This type of loan is also easy to apply and qualify for. To repay this loan, the terms are about one to three years and they come with fixed interest, so you know what you are paying right from the beginning.
Traditional Term Loan
Traditional term business loans will meet any business needs and help grow your business. With this loan, a business owner can borrow a lump sum from a lender and will be paid in increments over a set period or term. Repayment terms typically last as long as 10 or 20 years.
SBA Loan
SBA loans have small interest rates, long repayment terms of up to 30 years, and large loan amounts. SBA loans are government-backed but not funded by the government meaning a lender will work with you on your financing terms. The SBA only guarantees a loan.
Equipment Financing
There are many uses for equipment financing other than equipment like a forklift or a truck. You can also use it to improve your office, get a new payment processing software, and more.
Accounts Receivable Financing
If you have unpaid invoices, accounts receivable financing will help you turn them into capital and get that money you are owed into your pocket. The lender will also be able to help you in getting your customer to pay you.
Business Credit Card
Another solution are business credit cards. These can get you the working capital you need all while building your credit as a business. With a credit card you can also easily track all your business expenses which will be handy when it comes to bookkeeping.
Alternative Factors to Consider
Once you have secured the type of financing that works best for your business, there are other factors to consider when rebuilding your business.
Rebuild Your Staff
If you had to let some of your staff go due to the pandemic, you will need to hire your staff back when things improve. This means you will need money to find, hire, and train a new team.
Reclaim Your Loyal Customers
It will be important to be prepared to reclaim your loyal customers. You do not want your customers to go to another business with your product and services because you were to slow to act and reopen your business. Many people are anxiously waiting for things to return to normal and you will need to be prepared to bring your customers back.
Some ways you can do this is by coming up with marketing campaigns and strategies to inform and keep your customers updated of changes.
Restock Your Inventory
When you reopen your doors, you will need to have enough of your product or service ready as people have been going without them for months. It is important to be prepared with enough inventory, so you do not turn away clients. When you have the financing you need, you will be able to have the cash ready to use to have the inventory you need before the doors open.
Rethink Your Business Plan
The business plan you had before the pandemic might not work post pandemic. You should consider how your business can adjust to a new normal. Get clear on the strengths and weaknesses of your business and see what was working before that will not work in the future and readjust your business plan.
Conclusion
Make sure to have considered all the financing options to know which one is the best choice for your business. It is also imperative to have a strategy in place for when the economy turns to normal, so you are prepared when you open your doors. This will ensure that your business goes back to running stronger and successful than ever before.
