The economic impact of COVID-19 has plunged many businesses into financial difficulties. Lockdown restrictions have prevented many organisations from trading, which means their income stream has been obliterated. In fact, many firms are questioning whether they will be able to survive the economic uncertainty they’re currently experiencing.
For sole traders and owners of SMEs, disrupted cash flow can be particularly devastating. When you don’t have a significant amount of funds to fall back on, weeks or months with limited trading options can make it difficult to survive. However, there are options available to you.
If your business has been affected by COVID-19 and the subsequent trading restrictions and lockdown rules, take a look at these potential solutions and find out how they could help you:
1. Payment holidays
The effects of COVID-19 are unprecedented in living memory and major organisations are pulling out all of the stops to accommodate their customers. As everyone is in the same boat, you won’t be the only business owner trying to stay afloat in turbulent waters.
In response to the economic difficulties many people are facing, many banks, creditors, and companies are offering payment holidays and suspending interest on accounts. If you’ve yet to explore this option, it’s worth talking to your creditors and seeing what help is available to you.
2. Business loans
Commercial business loans are always a viable source of funding for sole traders, SMEs, and even major corporations. In today’s climate, they are even more of a lifeline. While many lenders are actively making their own financial products more widely available, the government is also providing backing for business loans.
Although there has been some delay in the rollout process, you should find that you’re able to access business loans if you meet the relevant criteria. Designed to help commercial entities overcome the economic uncertainty posed by the pandemic, this could be an effective way for you to keep your business in the black until you can resume trading.
3. Personal loans
When you’re a business owner, your personal income is usually inextricably tied up with the success of your business. If your business isn’t currently turning a profit, you may be unable to take an income from it. Of course, this doesn’t mean your personal obligations will stop too. You will still have essential bills, such as your mortgage, rent, or utilities, to pay.
Obtaining a short term loan could be an appropriate way for you to manage your personal finances while the situation is on-going. With New Horizons, you can obtain short term loans in a matter of minutes and borrow up to £5,000 over a period of 3-36 months. Visit the site to obtain an instant quote. If you’re expecting trading to resume in the foreseeable future, a short term loan could give you the funding you need in the interim period and enable you to stay up to date with your own bills.
4. Modify your operations
Although many people expect lockdown restrictions to be eased within the coming weeks, it’s unlikely you’ll be able to continue operating in the same way as before the pandemic. By modifying your operations, you can adhere to the new restrictions and resume trading more quickly than if you wait until things return to normal. In all likelihood, it could take months or even years until this happens, so updating your in-house processes could be the most effective way to prepare for a post-coronavirus business landscape.
Depending on your business, you may want to offer a delivery service, as opposed to a customer collection or standard retail option. Alternatively, you may wish to increase automation to enable you to operate with fewer staff. In addition to this, you could choose to add another arm to your business and diversify into another market.
Growing your business in the midst of a crisis
Although many business owners are concerned that the COVID-19 outbreak will ruin their company, the current difficulties don’t have to be disastrous for your business. In fact, it is possible for companies to build upon the current situation and increase their profitability during these difficult times.
There’s no doubt that your existing growth plans will have been thrown into disarray by the operational disruptions but taking the time to review them will allow you to explore new options. The lockdown measures mean that businesses and consumers are behaving differently, which gives B2B and B2C businesses the opportunity to introduce new products and services.
Furthermore, the increased demand within some industries could open the door for you to expand your business and reach brand new markets. While overcoming the current challenges may not be easy, there are various options available to you. With innovation and determination, your business can survive the current economic upheaval and even begin to thrive as a result.