There could be a silver lining for small businesses looking ahead to 2021.
Yes, the pandemic has taken its toll on small business. More than 90,000 small businesses have closed, according to the September Yelp Local Economic Impact Report, despite federal and state small business loans and programs dedicated to easing the impact.
But the pandemic’s impact may create new support for small businesses. A Salesforce survey showed that 59% of consumers preferred buying from a small business than from a large corporation.
That said, the pandemic has changed buyer habits, with many more buyers opting to buy online. The workplace has also changed, with more businesses moving to remote or hybrid workplace models.
The Growth Capital team is committed to our clients’ success. We look for ideas that can help clients attain their business dreams. Here are two ideas to consider that can be financed with small business loans:
Investing in technology
Many small businesses that were only brick and mortar have added online service. That switch has affected everything from marketing via website and social media to fulfilling customer orders and managing customer concerns.
The pandemic has more buyers shopping online. Small businesses that adapted short-term online solutions might consider more permanent and significant technology upgrades, such as improving and expanding websites or upgrading systems.
Investing in facilities
Short-term remote work arrangements could now be permanent. Small businesses doing a cost-benefit analysis of remote versus on-site teams should factor in the cost of keeping remote teams connected.
The new normal could require updating existing facilities or acquiring new ones to accommodate safety recommendations.
For example, a hybrid workforce model that combines remote and on-site work may mean reconfiguring an existing brick-and-mortar site. Another option is a satellite workforce model—an off-site workplace where small groups of employees gather for periodic in-person meetings.
Finding a small business loan
Upgrading operations or adding facilities are significant business investments. Finding conventional financing can be challenging, even in the current low interest-rate environment. Fortunately, small businesses have several financing options to consider.
The Small Business Administration (SBA) offers SBA 504 loans that can be used for fixed asset financing. The SBA has new, temporary borrowing guidelines that are in place until July 2021.
Below are some questions that small businesses may be asked as part of the loan application process:
1) What is the business cash flow, including cash flow impact from obtaining Payroll Protection Program (PPP) loans or Economic Injury Disaster Loans (EIDLs)?
2) How has the pandemic affected the business’s industry, including revenue and staffing needs?
3) Was the business affected by a shut-down? If so, how did it impact business operations?
4) Can the business count on customer sales and receivables?
5) Are business’s vendors able to support business needs?
There are several Ohio small business loan programs to consider:
1) An Ohio Regional 166 loan can be used for fixed asset financing.
2) The JobsOhio program offers loans and grants.
3) Many Ohio counties are using Community Development Block Grant funds to offer grants to local businesses.
Growth Capital wants to help small businesses fulfill their dreams. That includes helping them make the most of any silver lining that surfaces from the dark clouds of the pandemic.
To contact the Growth Capital team, give us a call at (216) 592-2332 or fill out our online contact form. We look forward to learning about your business and how we can help.