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Business Funding Options in the Age of COVID-19

Although financing in the post COVID world will be more challenging for many small businesses, there are financing options available, you just need to look in the right places. As we’ve witnessed in past recessionary times, the sad truth is that there will be fewer options available as many lenders tighten up their creditworthiness criteria and others step away from lending to small businesses entirely—at least for the short term.

Small business owners should expect their business lines of credit to shrink and the possibility of obtaining a new line will likely dry up for all but the most creditworthy borrowers; at least for the remainder of 2020. Many of the lenders who have started re-entering the market are those that traditionally re-enter a market first and offer financing at a premium. But frankly, that’s why they can afford to start working with small businesses now, rather than waiting for eight to 10 months from now.

Some of these lenders are willing to work with borrowers who find themselves with a less-than-perfect credit profile, a shorter business track record, and smaller annual revenues—the very businesses that will need a little extra capital to keep things going, Particularly in times like these, there is a direct correlation to access and cost that every small business needs to be aware of.

In light of that, here are 3 places to access borrowed capital in the world of COVID that every business owner should consider.

Vendor Credit
One of the most under-appreciated ways to access capital is by leveraging the terms your vendors and suppliers are willing to offer their good customers. It might not be a small business loan, but 30-, 60-, or 90-day terms allow you to not only free up cash for the next 30 days or more, it’s one of the best ways to build a strong business credit history—making a small business loan or line of credit easier to get down the road. What’s more, it’s often available simply for the asking.

Equipment Financing
Any tangible business asset, other than property or a building, used in the operation of a business may be considered equipment. For example desks, computers, a pizza oven, a dental x-ray machine, and construction equipment are all considered business equipment and can be purchased with an equipment loan.

Because equipment financing typically uses the equipment being purchased as collateral, there are lenders making equipment loans right now.

Business Cash Advance
A business cash advance isn’t really a small business loan, but rather an advance on future sales. This type of financing can be expensive, but is available right now even if you don’t have a perfect credit history. As an alternative to a traditional loan or line of credit, a business cash advance is more expensive, but while banks and credit unions are historically slow to enter the market after a recession, this type of financing is available right now.

Finding borrowed capital today in the midst of the aftermath of COVID-19 will likely require you to look outside of your traditional relationships with the bank or a credit union and consider alternative financing options to access the borrowed capital you need to fuel growth and fund other business initiatives.

Meet The Author:


Ty Kiisel

As a marketing professional I've spent the last 12 years of my career creating dynamic content marketing strategies and successfully executing on those strategies with hundreds of thoughtful, informative, and relevant content pieces that speak to the information needs of my customers. Informative and relevant content wins organic search results and rings at the cash register.

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