Why Small Businesses Should Get COVID Recovery Loans
The COVID-19 pandemic has not only affected the health and lives of millions of people but also impacted the global economy significantly. From local coffee shops to modern services like electric scooter ride-sharing platforms, businesses of all sizes from all sectors in Australia have been struck down.
It may take time for the world to see the pandemic’s long-term economic impact, but it’s clear that small businesses have taken most of the brunt of the pandemic. With small businesses having little savings left and finding it difficult to break even, this essential part of the economy has mostly temporarily closed during the peak of the pandemic.
To survive, most businesses in Australia have applied for recovery loans to keep operations running and pay staff as many await for the country to recover. Fortunately, government and private efforts for providing business loans during the crisis helped in lifting the economy.
Another sign of the country’s continued recovery is that loans that were put on hold during the peak of the pandemic are now mostly resolved. The Australian Banking Association reported that only 15 per cent of deferred loans remained. As the economy recovers, this is the perfect time for small businesses to take advantage of recovery loans to maximise business growth.
Call for alternative loan programs
Although it’s great news that Australia is recovering economically, this also means that support measures for businesses will be discontinued. In fact, government support measures such as JobKeeper and HomeBuilder grants will end by March. Meanwhile, Phase 2 of The Coronavirus Small and Medium Medium Enterprises (SME) Guarantee Scheme from the Department of the Treasury will end by June.
As a result, many small businesses are now looking for alternative loan programs such as online business lending schemes. An example would be Capify, an Australian small business lender that offers short-term business loans for a range of small businesses. Capify can be found on Finder.com.au, Canstar and other financial comparison sites, making it easy for businesses to make a quick loan.
Regardless of how you will choose your loan, it’s the perfect time to invest in one now. Small businesses need all the support they can get to attract customers again and put them back on the market.
Advantages of getting a loan
If you haven’t got a loan for your business and you don’t think you need one right now, here are some reasons to consider getting a loan.
Expand your product or service
Although it’s almost back to normal in Australia with more businesses opening and more people going back to their jobs, there’s still a bit of caution due to the pandemic and the new virus variant. With this in mind, you may want to offer something new to attract customers and encourage them to visit your store.
If you’re a local coffee shop, maybe you can also buy baking equipment to pair your coffee with cookies or cakes. If you’re a local grocery, you may want to invest in delivery service for your customers if you still haven’t. You can buy a bicycle or e-scooter for delivery services to reach more people outside of your community and boost your sales.
Ultimately, loans can help you expand and grow your business without exhausting your operational funds. Buying a loan for new equipment also helps you keep up to date with new technology, especially if you’re in the tech industry. You can continue to run and grow your business as you recover from the losses of the pandemic.
Buy more inventory
Since more people are out on the streets again, having a full stock ready will make sure you don’t run short when customers start flooding in. However, inventory is one of the highest expenses for businesses. Given very low sales for the past few months, taking a loan is a convenient way to fund your new set of inventory.
To be safe, make sure to observe and record your current daily sales and see if you really need to prepare for an inventory. If sales are still low, buying a loan for new inventory is not a wise choice. Maybe you need to invest in something else, such as providing a new product or service.
Buy back your store or buy a new space
Most small businesses have unfortunately closed and had to leave their current store or space. For those who want to bring back their business, applying for a loan can help you buy back your space or even find a better one around a better market. It’s also possible to get a loan to buy another branch for your store.
This is a big move, so it’s important to measure and predict the revenue that you will produce from buying a space. Nonetheless, when you’re ready to make that commitment, a business recovery loan will be there to support you.
Ultimately, buying a loan can help push you back to the market and boost your growth as the economy recovers. Of course, the three advantages mentioned are just some of the reasons for you to buy a loan. Whatever reason you may have to buy a loan, it’s only worth buying it if it will bring revenue to your store or service. During these times, a loan will help you recover as the economy bounces back.