The COVID-19 pandemic has devastated much of the world, both from a health and financial standpoint. Businesses everywhere have been impacted in some way.
Those businesses that have been able to weather the storm have likely faced some financial challenges along the way. Now, as the pandemic is hopefully getting under control, it’s time for businesses to start ramping up.
One of the first steps in doing so is to assess all financial damage the business sustained. Before scaling up and searching for financing, the company must know where it stands. This process will help enterprises identify the areas where they need help the most — and what financing can and should be directed toward.
Once that’s all in place, Scott Crockett suggests business owners should re-assess their business plan. This will help identify areas of need, opportunity, and weaknesses. It will also set them up nicely for when they apply for financing.
Business owners can then properly decide what they need financing for and what type of financing would be best after that. Some traditional forms of financing such as SBA loans, private loans through conventional banks, business lines of credit, and business credit cards could do well to fund more considerable investments in technology, equipment, and personnel.
There are alternative options such as inventory financing, accounts receivable financing, merchant cash advances, revenue-based financing and purchase order financing that more and more companies today are considering. Does this work for a post-pandemic recovery plan? Scott Crockett says that would depend on whether the business has strong sales already or is planning to have strong sales in the future.
A solid alternative option for many entrepreneurs is revenue-based financing. This type of funding is very similar to products traditional banks have offered but with many additional perks.
They are often easier to apply for, have less stringent qualification requirements, and quicker approvals. In addition, they offer the fast transfer of proceeds so the business can put the financing into action and various payment options that allow for cash flow flexibility.
Scott Crockett suggests that all business owners looking to scale up their financing for a post-pandemic recovery should strongly consider revenue-based financing for those reasons and more.
About Scott Crockett Scott Crockett is the founder and CEO of Everest Business Funding. He is a seasoned professional with 20 years of experience in the finance industry. Mr. Crockett’s track record includes raising more than $250 million in capital and creating thousands of jobs. Scott has founded, built, and managed several finance companies in the consumer and commercial finance sectors.