The country may be moving on from the pandemic in many ways, but the effects are still felt heavily by most. Business owners are no exception. So many companies are still struggling to manage the challenges and unforeseen costs of the pandemic. To complicate things further, new trends have emerged, brought about by the need to shift and adapt.
All of these costs, changes and trends require the same thing. Cash. And lots of it. For a time, the federal government’s Paycheck Protection Program provided small business owners with some relief. According to the U.S. Small Business Administration, just under $800 billion in COVID-19 relief was offered.
But that relief has now come to an end, as of May 21, 2021. If your business is struggling because of the pandemic, you are likely still in need of relief. The good news is that there are still many options available. In fact, some may prove to be a faster and more flexible solution. The key is to know what you can afford, make the right choice in lender and thoroughly examine each option.
Here are a few PPP financing alternatives to look into:
- COVID-19 Economic Injury Disaster Loans. If your business lost money as a direct result of the pandemic, you may be eligible for this type of loan. The SBA has been issuing these loans through Dec. 31 of 2021, or until the funds run out. The maximum available was increased from $500,000 to $2 million, with an extended payment deferment period of 24 months. (Keep in mind these loans cannot be forgiven like PPP loans.)
- SBA 7(A) Loans. This loan type is not unique to the pandemic, but they can offer long-term affordable financing to qualified businesses. The maximum funding amount for the SBA Express loan was recently permanently set at $500,000; this is up from its pre-pandemic amount of $350,000.
- Local Loans. States and cities have also stepped up to implement their own COVID-19 relief programs for their communities. These options are often a great option for affordable financing, especially if you fall within a traditionally underserved business group (e.g. minority-owned businesses and women-owned businesses)
- Alternative Loan Options. An increasingly popular financing option are alternative financing solutions like merchant cash advances, merchant loans and invoice factoring, to name a few. These options are known for being fast, often providing cash in as little as 24 hours. The key is to make sure the provider understands your industry, business type and the unique challenges you face.
If you are seeking PPP financing alternatives, just make sure you consider the long-term financial health of your business. Before jumping in, read the fine print, find out more about the lender and make sure it will be an affordable option that truly helps your business get back on its feet.