Are you considering getting a business loan amidst the pandemic? There are tons of things you should consider before going for that business loan…right before the beginning of the pandemic, most businesses already had many challenges to face. One of these challenges is inflation, which has furthermore led to a sudden increase in the market prices of raw materials, gas, etc.
Furthermore, the outbreak of COVID-19, a new strain of coronavirus has crippled many businesses with some businesses barely surviving, however, the impact of COVID-19 on businesses varies across all boards, while some business sectors were completely shut down during the pandemic period, some were operational even though not fully. For example, the aviation industry which is one of the worst-hit by the pandemic was not operational at all as it was not in use.
In addition, outlets such as restaurants are gradually being asked by the government to start skeletal operations, and it is being done under high scrutiny. Owners are compelled by governments to create additional spacing of 2 meters in between seats.
In many of its press releases, the world health organization, and other sister agencies already made it clear that it would take some years before the world recovers from the impact of COVID-19. Even though efforts are being intensified in getting vaccines for the treatment of the disease, it is obvious that damage has already been caused to many businesses already.
In a bid to salvage businesses from total collapse, the government is rolling out many bailout funds for legitimate business owners. In addition to this, the government is also assisting business owners in the payment of staff wages for those with proven payroll records.
As a business owner, staying afloat is very critical even during this trying time. Most businesses are getting cash drained as cash flow is either poor or it is not even forthcoming at all…but still, as a business owner, you have to keep your business afloat. To do this, the option is to consider taking a business loan.
Even before the advent of COVID-19, businesses have had to source for loans to meet immediate needs or to finance their growth dreams.
However, as a business owner, there are many factors you need to consider before going for business loans. This is necessary so as to avoid plunging the business into financial distress via bad loans.
Below are some factors to be considered in seeking business loans during the COVID-19 era:
Know exactly how much you need to stay afloat:
Firstly, as a business owner, before you start seeking funding, you need to know exactly how much you need to stay afloat. You should have a well-balanced account that will inform you of your daily cash flow, possible emergencies that you might need funds for, and also, the amount you pay as wages to staff. The knowledge of all these would furthermore go a long way to help you know the exact amount to seek for.
A vast knowledge of the types of business loans:
Although there are many types of business loans, the knowledge of each type of loan in existence would help you go for the best that suits your business needs. In addition, each type of business loan has different features such as credit limit, duration of usage, and also the amount of time and paperwork required to process. All these features are things you should be familiar with so as to be able to pick the one that suits your needs.
You need to know what experts are saying as regards the impact of covid-19 on businesses:
Importantly, the knowledge of what experts are projecting as regards what the impact of COVID-19 would be on businesses is very paramount. The major essence of this is the fact that it would help you select a long-term loan as against a short term loan.
Noteworthy, experts are projecting a long-term impact of COVID-19 on businesses, and as such, any business owner would know that it would take time for him to be able to make whatever money he is borrowing in order to stay afloat.
It is important you know how much you would pay as fine when you fail to meet deadlines:
In conclusion, don’t just rush to sign the documents as a business owner. It is important that you know the fine you will pay when you fail to remit as and when due. Most businesses are recording all-time low revenue due to COVID-19. It is furthermore important for you to know the fine you will pay when you default. By knowing this, you will be able to ascertain the capability of your business to pay the fine.
