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How to Get Funding for a Small Business During COVID-19?

The COVID-19 crisis has hit the small business sector especially hard. The measures taken to contain the spread of the virus have impacted the business community tremendously. 

How to get funding for a small business is a question that is in the mind of every small business owner these days. 

Luckily, there are many direct funding options as well as Government grants that can help you get funding for your small business during the Coronavirus pandemic. 

In this post, we’ll highlight some of the effective ways you can get funding for your small business during these challenging times. 

Personal Savings

If you have some accumulated savings in your bank account, you can use that money to provide funding for your small business during the pandemic.   

The SBA has provided many tips for small businesses to control their expenditure and increase savings.

Some of those tips include:

  • Get in touch with your bank and request a lower interest rate on your credit card. This is one of the ways you can decrease your credit card debt and provide more financial support to your small business
  • Opt for an automatic deduction to your savings account
  • Lower your monthly expenditure by opting out of the services that you don’t use regularly
  • For instance, if you have participated in any timeshare schemes or car-sharing membership plans, you can unsubscribe yourself to increase your savings
  • Do not move forward without having a feasible budget plan
  • Avoid buying luxury goods for your business and personal use. If unavoidable, consider investing in used or second-hand items. Many online groups on social media platforms promote the buying and selling of second-hand products. Check out those groups, or you can also ask your friends and family to help you in finding the right products for your needs

Credit Cards

To support your small business, you can either use your personal or business credit card. While confident credit cards are one of the best ways you can get instant funding for your small business, they often have high-interest rates and may result in a hefty debt balance in the end. 

If you plan to take a credit card route to provide financial support to your small business, just ensure you choose an option that comes with the lowest possible interest rate and feasible repayment conditions. 

Unsecured Same Day Loans

Unsecured same day loans are an excellent way to arrange instant funding for your small business.

Whether your small business has suffered in terms of equipment resources or you need to hire additional staff to cope with the post-COVID challenges, these direct funders can offer the best possible solution in a quick and cost-effective manner. 

Government Grants

There are many Government-backed grants options that can help your small business get through these challenging times. Paycheck Protection Program, Small Business Emergency Microloan, and Emergency grant of $10,000 to SBA Economic Injury Disaster Loan Applicants are just to name a few.

Crowdfunding/Crowdlending

Crowdfunding or crowdlending is all about asking groups of people for funds on dedicated crowdfunding websites. 

These individuals provide funds in exchange for a gift or the product. The only difference between crowdfunding or crowdlending is that the latter involves paying back to the funders in the form of money.  

Corporate Programs

Some corporations also offer corporate programs to provide financial support to small businesses. The purpose of these schemes is to provide affordable business loans to those small businesses that do not qualify to borrow money from traditional credit sources. 

Angel Investors

Angel investing and venture capital is ideal for businesses that are doing really well in their area of expertise. Venture capital and angel investing might not be a good option for your business if it has suffered a loss during the past few months. These options also involve strict terms and conditions. 

SBA Loans

SBA has also introduced many small business financing schemes to support the small and mid-scale businesses during the Coronavirus outbreak. As there is no collateral required, these loans are a good option for businesses that do not have any property or asset to offer against collaterals. 

Bank Loans

Although most of us prefer to connect our banks to seek financial help, they’re least supportive when it comes to issuing financing to small businesses. Unless you have solid paperwork and projection reports, it might not be very easy to acquire funding for your small business from this source. 

Although lockdowns in most of the countries have been lifted and businesses are getting back to normal, the damage this pandemic has done to small businesses will take many years to recover. If you’re not sure how to get funding for your small business during these hard times, we hope this post has cleared some of your doubts.

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