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As the COVID-19 pandemic stretches on, it’s becoming clear that your business needs to change tactics in order to survive this crisis. With sales down and no end in sight, small business owners have to figure out how to get cash flowing back into their business and keep staff employed. But how? You HAVE Got The Power coaching invites you to read up on these options for keeping your business afloat through the pandemic.
Find new ways to create cash flow
The pandemic forced countless businesses to shift to curbside pickup and delivery or limit their on-site capacity. However, because these models limit the number of customers businesses are able to serve, many have found themselves struggling with cash flow.
Continuity through the pandemic and beyond requires creative solutions to cash flow problems. In addition to cutting costs wherever possible, look for ways to serve more customers while staying COVID-safe. Can you start an online store, diversify your offerings, or utilize third-party delivery services?
Get a loan
Many small business owners found themselves shut out of the competitive Paycheck Protection Program and Economic Injury Disaster Loan programs. However, that’s not the only option for accessing working capital during the pandemic. Small businesses that have an established relationship with the Small Business Administration can qualify for relief through an SBA Express Bridge Loan of up to $25,000. Other resources for businesses include the Main Street Business Lending program, traditional SBA loans, and grants and loans from companies and other non-governmental organizations.
Still, another option is an LLC Business Loan, and these can be ideal if bank requirements are too strict. LLC business loans can be found through the online business lending marketplace, and there are six different types. LLC-specific loans include an SBA, bank and unsecured loans, as well as invoice factoring, line of credit and a merchant cash advance. The key here is to ensure your business is already registered as an LLC. If you still need to cinch this portion of your business, you can find out more about how to register your Nevada LLC through this link.
Raise equity capital
The tight lending environment has made it difficult for some businesses to access the debt financing they need to stay afloat. For those small businesses, it may be worth turning to equity financing. Equity funding can come from friends, family, angel investors, venture capitalists, or even equity crowdfunding. However, raising equity capital means giving up complete control over your company, so it’s important to understand the pros and cons of this option.
Consider mergers and acquisitions
Are you struggling to make ends meet despite a loyal customer base? If you have a solid business but need more reach, consider a merger. Not just for multinational corporations, business mergers can help small businesses reduce operational costs while growing their customer base.
Alternatively, small business owners might opt to sell their company in an acquisition. Acquisitions are a good choice for companies that have watched demand for their product or service evaporate during the pandemic or for business owners who want an exit without putting employees’ livelihoods on the line.
When to file for bankruptcy
If bills keep piling up and your attempts at generating cash flow prove unsuccessful, it may be time to consider bankruptcy. Chapter 11 bankruptcy lets a business renegotiate its debt in order to get relief from creditors and become profitable again.
Since the passage of the Small Business Reorganization Act of 2019, enacted in February 2020, Chapter 11 bankruptcy has also become easier and more affordable for small businesses. Sole proprietors can file a Chapter 13 bankruptcy to restructure a business as long as their debt falls under program limits.
Before filing, it’s critical to consult with a bankruptcy professional to assess whether bankruptcy is the right choice for your business. If your business lacks viability in the new economy or has minimal debts, dissolution may be a better option.
The COVID-19 pandemic has proven to be a long, difficult road for small business owners. While countless businesses struggle with closure, other small business owners are finding creative ways to keep their doors open through the pandemic. From diversifying your business to securing a capital infusion, there are plenty of resources available to help your business weather this crisis.
Another great way to ensure you can keep your business steady through uncertain times is through You HAVE Got The Power business coaching. Whether for just yourself or your entire team, we have a plan to help you reach your goals.