At Growth Capital, we do more than make small business loans. We stay a step ahead of business trends, whether it’s events that affect small businesses or small business resources that can help your business thrive.
But we never would have predicted the global pandemic that was particularly challenging for small businesses. Thankfully, it appears to be subsiding—and just as important, small businesses appear to be increasingly confident about prospects.
That increased confidence seems to drive interest in capital expenditures. The April National Federation of Small Businesses (NFIB) reports a 7% increase in the number of small business owners that plan capital expenditures in the next few months. That 7% increase in potential capital outlay follows a 47% increase in actual outlay from October 2020 to April 2021.
In short, small businesses seem poised to plunge into the post-pandemic new normal—and the Growth Capital team wants to help them make the most of it.
With that goal in mind, the team identified three small business trends that might impact small businesses’ capital outlay plans. The trends are:
- Labor costs. The NFIB survey showed that 51% of small business owners had raised or will raise compensation to entice new employees. For some small businesses, paying increased compensation might mean cutting investment in other areas.
- E-commerce. Statista data show that e-commerce sales increased from $600 billion to $843 billion between 2019 and 2021 to date. (E-commerce sales might top an eye-popping $1.2 trillion by 2024.) Small businesses might need to upgrade e-commerce capabilities to keep up.
- Touchless payments. The pandemic resulted in more retailers turning to touchless payments. SCORE cites National Retail Federation survey results showing that 69% more retailers adopted touchless payments in 2020.
We know that not all these trends will affect every small business. At Growth Capital, we make a point of learning about small businesses’ dreams and goals so that we can make thoughtful, tailored recommendations on ways that small business loans might best finance growth.
Small Business Loans
A 504 loan from the Small Business Administration (SBA) could be a cost-effective way to finance certain upgrades. The SBA 504 loan program helps existing small businesses with fixed financing asset needs to obtain long-term, fixed interest rate loans at lower down payments.
While these loans are mostly used to finance land building and acquisition, the SBA 504 loan can also finance building improvements, renovations, and equipment. Small businesses looking to upgrade e-commerce capabilities and touchless payments might find that an SBA 504 loan is the ideal solution.
Small businesses that have to shift capital to employee compensation might also look to an SBA 504 loan. While the loan can’t be used for employee compensation, it can be used to cover a range of facility needs, freeing up funds to meet compensation needs. This fact sheet has more detailed information about SBA 504 loans.
Small Business Resources
At Growth Capital, we look for resources to help small businesses manage challenges and make the most of opportunities. One of our favorites is SCORE’s innovative small business recovery hub. We’re particularly impressed with the small business leader resiliency training. SCORE also created a comprehensive checklist that can help small businesses successfully reopen.
Like many of our small business customers, we are optimistic that we’ve faced the last of the pandemic challenges. But we’ll be ready to step in with small business solutions, regardless of what the future brings.