In the face of an unprecedented crisis, the federal government stepped in to help millions of businesses with PPP Loans.
The Paycheck Protection Program (PPP) doled out billions to businesses of all sizes to keep them afloat during the coronavirus pandemic. That’s the good news.
The less good news is that plenty of struggling small businesses were turned down for PPP loans, some of them multiple times. Many small businesses run by women, Black, and Latinx people were left out in the cold due to structural racism and a lack of relationships with big banks.
There is hope beyond the PPP, though.
Small and medium-sized businesses can look elsewhere for financing and can employ specific strategies to cut corners in order to get by during these turbulent economic times.
Alternative options for small business financing
If your business needs the cash, there are other ways to find it.
Businesses like yours have weathered storms before without PPP, and they’ll do it again even at a time like this. Here are few options to consider:
- SBA’s Economic Injury Disaster Loan (EIDL) program: Designed for small business, sole proprietors, and independent contractors impacted by COVID-19. Funds can be spent on any working capital-related expenses, unlike PPP.
- Federal pandemic assistance programs: There are a variety of alphabet soup-like programs to supplement traditional state-based unemployment insurance. They range from the Federal Pandemic Unemployment Compensation (FPUC) program to the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs.
- SBA Express Bridge Loan program: If you have an existing relationship with an SBA Express Lender, you could qualify for a fast $25,000 loan.
- SBA Microloans: Up to $50,000 for qualifying small businesses (though the average loan size is around $13,000).
These are just a few options open to business that have not found success with their PPP applications. Take the time to do your research and explore other opportunities for loans and lines of credit. They are out there and lenders have been given considerable support by the government to be rather generous given the economic downturn.
Beyond additional funding for your business, there are a number of ways to make your dollars go further.
Other ways to ease the burden of small business finances
Now is the time to cut operational costs. Luckily, with some ingenuity and technology, that’s very possible.
Innovate how you manage payments.
Since in-store purchasing and handing over cash is much harder these days, now is the time to introduce contactless payment solutions (if you haven’t already). Beyond that, customers will now be looking to make purchases through a variety of third-party applications like Apple Pay and PayPal, so be sure your business has a strong omnichannel presence when it comes to payments. Also, switching payment processors could help you save on fees in the near-term.
Automate where you can.
If you’re looking to save a few hours each week and a few dollars, automating routine processes is the way to go. The key here is setting up workflows that are simple yet effective using software that isn’t too dense to navigate for employees to ultimately optimize your small business operations. This is both a short-term and long-term fix that reduces your overall operational costs and makes more time for more important work like securing new customers and improving product quality.
Streamline core business functions.
Now is the time to revisit key business processes like vendor communication and invoice management. The right software can help you speed up processing times while catching costly mistakes and keeping more accurate records. Over time, these little improvements will pay dividends in the form of time and dollars saved.
Strike a better deal with your bank and other lenders.
Take the time to review your banking and lending agreements. The first step is to ensure that your business is getting a good deal and that no unfair banking practices are taking place. If something suspicious is going on, address it immediately. Beyond that, many lenders are allowing customers to re-negotiate lending terms given the economic circumstances. Whether that’s deferring payments or securing more favorable loan terms, it’s worth a conversation with your lending institution.
Many options to support your small business beyond PPP loans
Finding other funding sources will mean lots of time spent researching and applying to various programs, but hopefully some of the resources here speed up your journey.
Putting into practice some tried and true methods for cutting corners and reducing your business’s burn rate can make a huge difference when it comes to staying afloat. Whether that’s automating key business tasks or streamlining business functions, there’s a great deal that small businesses can do to stay strong even in the toughest of times.