After a year-long struggle with COVID, small businesses are still feeling the heat of the global pandemic.
Beyond health concerns, the pandemic brought restrictions and a way of life that led to the temporary shutdown of businesses.
With the current situation still threatening to slow down commercial activity, SMBs must brace themselves for a new era of business.
Below is a complete guide through the consequences of COVID and how microbusinesses can survive and grow in a slow economy.
On the business front, COVID has left an unprecedented negative impact on small enterprises.
Though the pandemic demanded extreme measures like imposing stricter lockdown regulations, entrepreneurs still maxed on the available resources.
Most suffered financial problems and used up their financial reservoirs but still faced challenges streamlining their operations.
To put claims into figures, the number of operational micro-businesses dropped by 22 percent, to around 3.3. Million between February and March last year. This figure represented the worst ever drop in business ownership.
According to the US Census Bureau, nearly half of micro-businesses admitted to having faced challenges thanks to Coronavirus.
Of those who met obstacles, only 20 percent had the financial capability to continue operations for up to 3 months.
Further results show that nearly 42 percent of enterprises laid off some employees or shut down their business temporarily. Most companies only had the financial power to stay afloat for a month.
All these figures point to an unanticipated cash strain for small businesses thanks to a global health crisis.
Expectations Vs. Response
So what did SMBs expect as a virus threatened to freeze the economy? Well, most businesses anticipated loans from the government in the form of relief funding.
Fortunately, the US Federal government responded swiftly to those expectations. Congress passed the Coronavirus Aid, Relief, Economic Security Act (CARES Act ) in late March 2020.
The CARES Act, worth 2.2 trillion USD, serves as an economic stimulus looking to assist the vulnerable and severely affected groups with fast and easy loans and grants.
Under this Act is a 953 billion USD package dubbed the Paycheck Protection Program (PPP) to help micro-businesses, non-governmental organizations, sole proprietors, the self-employed, and others.
Qualified businesses can borrow these loans through the Small Business Association (SBA).
Still, these relief packages haven’t managed to serve the growing financial needs of microbusiness.
The Bottom line: Where to Source Funds
Business owners looking to survive the economic ecosystem should consider alternative lenders. As banks lend sparingly due to an unpredictable economy, these modern companies offer fast and easy loans to help small firms stay afloat.
Michael Hollis is a Detroit native who has helped hundreds of business owners with their business loans. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working entrepreneurs across the country.