So, what comes next? After a year of unprecedented markets, what should be expected for the economy, business growth and industry change? Businesses are going to need to find the funding and support to continue to change with economic recovery. Alternative financing options and business loans may be the ideal solution for those who are able to see the light at the end of the tunnel.
The Impact of 2020 on American Business
When 2020 shook up the markets in every industry all over the world, it presented a unique opportunity. Because of the market disruption from interrupted supply chains and changed consumer demands, the doors were thrown wide open for entrepreneurs. Peterson Institute for International Economics (PIIE) reported that there were 23% more startups during the first three quarters of 2020 than during the same time period of 2019.
All of these new businesses are going to need to keep growing if they want to stay afloat beyond their first year. The veteran businesses that were able to weather the storm of the pandemic are in a similar position. Many businesses faced increased expenses with heightened digital migration and a pivot in the demand of goods. At the same time, supply shortages, disruptions in the chain and consumer changes—all sparked by the pandemic—caused many companies to lose profits during the same time period.
The US Census Bureau reported that COVID has “devastated the nation’s economy.” Historical trends predicted a working ratio of employment-to-population sitting at 61.3% for 2020, but it plummeted to 51.5% instead.
Yet, business leaders are feeling optimistic. McKinsey & Company says 73% of businesses felt the economy was recovering and would improve by the summer of 2021.
Funding to Navigate 2021
While there are numerous SBA lending programs and borrowing is cheap at the moment, to get the gears turning again in Q2 of 2021, traditional (bank) lending is expected to tighten up.
Financing will become a lot more difficult to secure. Businesses will be forced to look to alternative options (such as factoring, asset-based lending, supply chain finance, floor plan financing, purchase order financing, etc.) to maintain cash flow and keep operations moving.
Business loans have had some of the lowest interest rates we’ve seen in years. But, those rates are rising with the expectations of economic recovery and growth.
Be Ready to Capitalize on Opportunity
As things start to reopen and grow, your business needs to keep up. This is going to require funding to bridge the gaps and increase the opportunities.
Now is the right time to check out financing options.
Increasing your cash flow will create more opportunities for 2021. ENGS offers full-service Working Capital solutions that are tailored to meet your business’s needs.