Businesses of all sizes are doing their best to navigate the outbreak of COVID-19. Understandably, all alternatives are being considered, but taking out a business loan during the coronavirus pandemic is one the most logical answers to the challenges that businessmen and women are facing right now.
Without the high interest rates of payday loans or the inconvenience of cutting spending, a business loan is one of the best options for organizations looking for funds during these unprecedented times.
Advantages of Taking Out a Business Loan During the Coronavirus Pandemic
You should choose a business loan if you need a substantial infusion of cash that meets these criteria:
- It’s quick and convenient.
- Allows you to stay focused on running your business
- Offers a reasonable interest rate
- Doesn’t sacrifice future gains or opportunities
In short, taking out a business loan during the coronavirus pandemic checks all the right boxes to help you steer your organization through these uncertain times.
As you will see below, other funding or borrowing options listed here are less convenient, and should be considered only as a last resort.
Cutting Spending: Not Always Possible
Reconsidering your expenses is a logical option during a crisis. However, there is only so much spending you can cut. Besides, the benefits of saving accrue over time, while you need cash right now. Saving as much as you can is a smart move, but not the definitive solution that will allow you to keep growing your business.
Getting a Gig Job: Not Viable
If you are in charge of a small business, finding and keeping a side job during a pandemic is not a realistic option. As an entrepreneur, you are dealing with more than enough challenges already. Another job would take up a lot of your time and attention, and those are invaluable assets when you face demanding situations. You need an option that allows you to stay focused on running your core business.
Payday Loans and Credit-Card Cash Advances: Excessive Interest Rates
It is a well-known fact that payday loans and credit-card cash advances are short-term solutions with very high interest rates. In addition, you could damage your credit score if you max out your credit card. Be very careful when you consider these options, since they are known to draw people into vicious debt spirals.
Taking Money Out of Your Retirement Account: Not Advisable
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows retirement account holders to withdraw up to $100,000 of their account and put the money back in with no penalty as long as they repay the funds within three years. This strategy is not advisable because it can have a significant impact on your retirement savings. In fact, with this alternative you would lose out on the compound growth of any funds you withdraw.
As you can see, taking out a business loan during the coronavirus pandemic is one of the most interesting options available.
At Uniko Biz Solutions we understand the needs of organizations striving to maintain business growth. Our mission is to meet your borrowing needs so that your company or small business can reach its full potential.
We are located in Riverside, California. Contact us today by email or telephone ((888) 698-6456) to learn more about our services, our philosophy, and our commitment to working with you to achieve prosperity together.