Moms in Business: Financing Challenges in the Post-COVID World
Being a woman entrepreneur, especially a mother, means you are facing more challenges than your male counterparts by default. Getting business financing, in particular, is harder for women at the best of times. Now is decidedly not the best of times, and the situation isn’t going to improve soon. Therefore, you have to learn how to navigate the business world in a crisis and make some changes. You might not care for many of them, but it’s best to be prepared for the worst and be pleasantly surprised.
How the COVID-19 Crisis Is Making Small Business Financing Disappear
The COVID-19 pandemic is an unprecedented disaster for the global economy. The World Bank states that we are now facing the worst recession since World War 2. The impact of the pandemic on every level of our lives is so vast, it’s impossible to fully comprehend the scope of it now. Many of the changes it triggered will take years to settle. For example, it has already changed consumer behavior as well as the approach to remote work.Both online shopping and telecommuting used to be popular but not truly widespread. Now, when society has lived through the period when only those options were available, the entire outlook has changed. It’s a fact that the world as we know it won’t go back to where it was before. But where it will go from here is hard to predict.One thing that business owners today know for sure is that they won’t be able to go anywhere without funding. PPP money has run out or is very close to it. There are no similar financing options forthcoming.Even before this, the majority of lenders have stopped loan originations. This means they simply cut financing options that aren’t funded by the government. Online lenders, in particular, were swift to take this action. And they are the ones that small businesses relied on most as they were willing to accept much riskier clients than banks.All things considered, the entire small business financing industry is on lockdown now.Furthermore, equity financing will also go further down because of the stock market crash and subsequent volatility. For you as a business owner this means that you won’t be able to get loans. At the moment, no one can predict exactly how long this will last.
Will There Be Any Financing Providers for Desperate Businesses?
No active lenders seems like a bleak future for businesses all around. With banks upping their eligibility requirements for loans, the only solution for entrepreneurs is to look for alternatives. This means that now, more than ever, you will need reliable small business financing guides. They will help you navigate offers from alternative lenders that will soon begin to stir.It’s imperative to use trustworthy sources for lender research now because this crisis is sure to spawn a multitude of predators. There will be many financing sources that will use desperation to burden people with impossible loans. They will offer extremely high interest rates and restrictive payout terms.Using a loan like this is guaranteed to put you into a worse situation than the one you started with. In fact, this kind of debt could sink your business all on its own. Compounded by economic volatility and various post-pandemic issues, your chances of avoiding bankruptcy would be slim.However, even reasonable people who can see the trap might not have a way around it. Loans are almost impossible to get already. And it’s expected to get worse as the global economic recession drags us all deeper down.Therefore, with no other options, many would use those predatory loans anyway. If you are thinking about doing the same thing, you need to prepare as much as you can. There might be no way to remain completely safe in the business arena today. But nothing stops you from trying to minimize the fallout for yourself, your business, and your family’s future.
How You Can Prepare to Weather Down This Crisis
The first thing you need to do to start preparing for the full-blown pandemic crisis fallout is to assume the worst. Read the news and predictions from leading economists and financial experts. Then, assume it’s going to be even worse. It’s in this set of mind that you should start planning on how to mitigate the damage. Also, accept that there would be some damage. No one is going to get through this period unscathed. Even tech companies that seem to be doing well now will soon face the problem of consumers not having the funds to buy anything they offer.First of all, you should try to deal with the debt you have right now. Paying out your loans is not an option for most people. Therefore, try to refinance every loan you have if it’s possible right now. Also, look into debt consolidation options. The majority of lenders have cut their interest rates now because of the crisis. But they also upped the eligibility requirements for those who could benefit from these rates.It’s best to talk to a consultant in your primary bank to see what options are now available to you. Trying to get your loans into one place might open up some opportunities for your business.Once you deal with your current debt as well as you can, audit your emergency funds. This piece of advice might seem useless now, but it’s imperative to avoid getting a loan that will swallow you up right away. You must have some kind of safety cushion in the form of emergency funds.If you don’t, it’s the time to consider extreme business cost cuts and layoffs. In fact, closing up your business entirely might be a necessity. Try to put it “on hiatus” in case financing is completely unavailable to you. But keep on the lookout for good lenders regardless.This way, you will be prepared to act as soon as the situation improves. However, you will also be safer by not being crushed by debt you could never repay.It’s impossible to see the future now as even expert forecasts aren’t reliable. So play it as safe as you can. There will be time for daring yet.