Coronavirus The epidemic has shut down hundreds of small businesses across the country, but now applications for new businesses are increasing. Actually, US Census Bureau Reported a 31% increase for the week ending 7 November compared to a year earlier.
Drawing on simplicity and the right financing is important for many COVID era startups.
Read more about funding startups during the epidemic, including success stories.
Why start a business now?
An epidemic may seem like a risky time to start a business, but there are some changes. Barry Moltz, Chicago-based writer and small business consultant, business closure means less competition and potential bargaining on office space.
“You have a good chance of dominating the market when others have left,” says Moltz.
The downsides of a COVID-19 startup include the inability to predict when the crisis will end and may increase the risk of the economy deteriorating before it gets better.
Nevertheless, the epidemic is proving to be the mother of invention. The health emergency is mixing two types of entrepreneurship, explains Thomas Sullivan, vice president of small-business policy at the American Chamber of Commerce.
“There is dream entrepreneurship, where people want to do what they always want to do,” says Sullivan. “After this the need is for entrepreneurship, and this includes when people lose their jobs, but still need to feed their children. Right now, with COVID, we’re seeing two merges.”
How can you use credit cards and debt to start a business during an epidemic?
Even if you plan to use it for personal savings or to profit from another business venture, you want to keep a safety net, especially during uncertain times.
Eligibility for a business loan is always tough, but the epidemic has made it even harder, said Eric Goldschin, Partnership Editor at JustBusiness and an expert in small business financing and lending.
Says Goldsen, “Landers are poets right now and the risk is high. “Also, consider 0% annual rate credit card, If you are eligible: You will not get a better deal from 0% interest.
Consider these tips for using credit cards and debt to start your business without paying a mountain of debt:
- Protect your credit rating. also for Business credit card And loans, most creditors will check your personal credit score. The better your credit, the more low-interest options you have.
- Organize Your Business Documents. The creditors will likely ask for articles on your formation and business plan, plus tax returns and bank statements.
- Look before you leap. Business funding is not a blank check. Keep in mind that the money you spend today will have to be refunded and these payments can limit growth and profit.
- Compare lenders. Choose a credit card that meets your needs, even with a 0% APR. introductory Offer Or generous award or both. Read lender reviews And look for a loan that offers the lowest APR and terms for you.
- Stay on top of payment. Once you get a credit card or loan, make sure that you can make your payment on time. With a credit card, cover at least the minimum amount due, but aim to repay each balance period to avoid interest charges. If you are struggling with credit card or debt payments, talk to creditors Relief options.
Startup Success During COVID-19
Entrepreneurs are finding opportunities in a health crisis and businesses not only survive, but thrive, using credit cards and SBA loans.
Baking was a side gig for Heather Ashley until an epidemic devastated the hospitality industry and she lost her job.
“I had to do something,” Ashley says. “I thought, ‘If ever it’s time to open my own space, it’s now.” When the other bakeries were closing, I signed a lease. “
She opened The Cookie Cake Company in Jersey City, New Jersey. Because operating a storefront bakery is expensive, Ashley says she uses credit cards for short-term financing. Its business credit cards also provide valuable rewards and benefits, including extended warranty coverage for equipment.
Despite the risk, the reward has been great for Ashley. “I never thought I’d get my own storefront, and it’s also crazy that I did it during COVID,” she says.
“It really sounds like an accomplishment,” Ashley says. “My 7-year-old says she wants to work here when she grows up.”
Of course, the epidemic not only disrupted hospitality, but also transformed retail and brick-and-mortar stores into a digital business model.
Barbie Coleman did not plan to open a storefront for her online business when “just before the world closed, the right location became available,” she says.
“It’s in a historic residential neighborhood – the center of the city,” Coleman says. “When retail collapsed, I had already gone down the path to get the store ready and wasn’t about to stop.”
His Columbus, Ohio-based urban diversified brand sells everything from household goods and accessories to pet supplies.
Coleman says he used a business credit card to buy inventory and signage for the store. Then he applied for SBA Financial injury disaster loans To pay his credit card debt and cover operations.
Coleman’s approach has worked: Sales have been strong. He exceeds security protocols and opens his store after hours for private shoppers who still do not feel comfortable.
“People want to go shopping to feel normal by going to a neighborhood store and picking up some items,” Coleman says. “In addition, they want to support small business.”