Business Financial Solutions in this Time of Pandemic

  • Covid-19 , Lending
  • 07.12.2021 11:24 am

The pandemic had negatively impacted businesses worldwide. Sources of revenues became scarce due to lockdowns declared by governments. Vice President Kamala Harris and Harvard University both stated that about a third of the United States’ small businesses have closed down because of COVID-19.

The roll out of vaccines and the availability of business loans online have thankfully brought several businesses back into the fold. If you’re considering reopening or starting a business right now, you should know what business financial solutions you can have access to in this time of pandemic.

Invoice Financing

Its nature automatically made invoice financing a favored choice among businesses looking to survive in this ongoing pandemic. Invoice financing allows entrepreneurs to borrow money using the value of pending invoices as a guarantee.

With the economy slowly recovering, some businesses have now regained enough strength to start repaying their obligations. Entrepreneurs with pending invoices can now convert those accounts receivables into cash while they restart collections. The cash advance will help bolster their cash flow until all debts have been repaid.

Inventory Financing

Despite the availability of vaccines, there are still some sectors of society who are hesitant about shopping in physical stores. These are people who’d prefer to shop online, or call their orders in and have them delivered to their doorstep.

Businesses with physical inventory can still take advantage of this demand but flow constraints prevent these companies from making their moves. This is where inventory financing comes in. This form of loan allows companies to pledge their physical inventory as collateral to receive funds that can keep their cash flows positive.

Merchant Cash Advances

The pandemic has demonstrated the viability of online shopping as an alternative to traditional commerce. Credit and debit cards, together with electronic wallets, have experienced an increase in usage during the pandemic.

If your business accepts credit cards as payment, you could take advantage of merchant cash advances. Lenders will extend to your business a loan that is calculated against your average credit card monthly sales in exchange for a percentage of your future credit sales.

The Bottom Line

Businesses have several financial solutions to help them keep their cash flow strong during the pandemic. These include financing against inventory, invoices and credit card sales. Entrepreneurs should take advantage of these to hold on despite the challenges of COVID-19.

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