Although 57% of customers believe small businesses can adapt to the extraordinary circumstances of the COVID-19 pandemic, it’s harder than ever for small businesses to maintain cash flow and make ends meet.
Here’s a look at fresh, creative, and reliable funding sources to help your company thrive in unstable times.
Does your small business need more funding?
Signs your business needs outside funding include:
- You need help staying afloat due to shutdowns. Global changes to how we work and live may have forced your business to adapt, which can be costly in itself.
- You need specific equipment, talent, or space to run or expand your business. Additional funding may be the boost your business needs to reach its next stage of growth, regardless of economic uncertainty.
- You need a boost to get past break-even. Tools like the U.S. Small Business Administration’s (SBA) break-even analysis template can help small business owners determine their break-even point or the point at which revenues equal expenses.
How to start your funding search
Search close to home
Consider crowdsourcing or asking friends and family for loans, or visit your local bank to learn more about their small business options. Many cities and state governments can help — visit this state-by-state small business resources guide to find a program near you.
Update your business plan
Any business that wants to apply for grants needs to have a clear, concise idea about what they need, and why. Evaluating your current business plan, and where it could expand and evolve with more capital, will help you build a strong case for that funding.
After that, focus on the following steps:
- Determine how much money you need how much money you need.
- Compare multiple funding options to determine which best fits your business.
- Update your business plan to reflect how you’ll apply the funding.
- Apply to the grants you selected, and ask mentors to review your application.
- Get clear about why you need funds and what you’ll create with the extra capital. This information is key for securing funding — and making the right decisions with it.
Federal grants, loans and loan forgiveness programs
The right business grant can help your company survive uncertain times, retain employees, or kick-start a new product. Small business grants can be found at sites like Grants.gov, Challenge.gov, and GrantWatch.
Search for grants through databases like those linked above, or by searching for terms like “small business grants” or “grants for [your type of business]” via your preferred search engine. Many public libraries also maintain subscriptions to grant databases like GuideStar or provide free training on how to seek grant funding.
Small businesses directly impacted by COVID-19 and the economic downturn may be eligible for certain funds through the Coronavirus Aid, Relief, and Economic Security (CARES) act. This law, enacted by the U.S. Small Business Administration (SBA), dedicates $376 billion to aid workers and businesses affected by the pandemic.
The following funding programs are still accepting applications:
- Economic Injury Disaster Loans (EIDL): Businesses experiencing financial difficulty from coronavirus can receive up to $10,000 through this loan advance program. This advance doesn’t have to be repaid.
- SBA Express Bridge Loans: Any business with a relationship to an SBA express lender can use the SBA Express Bridge Loans to receive up to $25,000 promptly.
- SBA Debt Relief: This program helps shoulder the burden of financial debt by paying principal, interest, and associated fees on outstanding loans.
The Small Business Administration also manages a network of several lending institutions that can provide business owners with quick access to money in difficult times. Through the Lender Match program, the SBA can connect business owners with lenders within 48 hours of application. – Read more
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