COVID-19 has had an undeniable impact on all businesses, whether negative or surprisingly positive, or the many in between. As a result, you might be considering taking a loan out right now. You probably also have a lot of questions. If this sounds familiar, you certainly aren’t alone. 

Business owners across the country are asking themselves a wide variety of questions including whether they should, for example, take a loan on their equipment if the interest on the loan is worth it, and how to calculate the return on their investment.

While the answers certainly vary case by case, we can say that taking a loan out during the COVID-19 pandemic is the right business move and can be a great time to:

1. Replenish your cash flow: Many businesses have seen their revenues drop, with no warning. Cash flow loans allow you to still have money to pay your bills, replace lost earnings, and prepare for better times ahead. 
2. Care for and store equipment: Being in the middle of a pandemic does not mean you don’t still need to take care of your inventory and equipment, which you’ll be thankful you did in the long run. A business loan can help cover these costs.
3. Pay rent, equipment, and other overhead: A loan can help ensure you don’t risk losing your business, equipment, or do any permanent damage to your credit score just because of a temporary situation that is out of your control. 
4. Make payroll:  Even during the coronavirus pandemic, you still need to pay your employees and give them a sense of stability, now more than ever. You can use your loan to make sure you keep up with your payroll. This will not only help with turnover, but also means you won’t have to worry about replacing your staff once the pandemic is over.
5. Keep up with sales and marketing: You can still reach customers (maybe even more customers) even if you can’t make face-to-face sales right now. It just requires a bit of adaptability and planning. You can use your money to set up an online marketing campaign, for example, and create a whole new stream of revenue you didn’t have before. 

Across the country, COVID-19 has forced businesses to scale back their operations, if not completely shut their doors. 

This has many business owners just like you investigating the world of business loans for the first time. We believe that taking a loan out can give your business the lifeline it needs to get through this (temporary) difficult stretch. 

The devastating financial burden that businesses have faced means many need some extra financial health to ride out the (medical) storm.

While our nation’s businesses are continuing to face unprecedented economic disruption, one of the most important things you can do is to go to a trusted advisor. This is certainly not always the case in the borrowing industry, as many borrowers will attest to.

But with some careful planning and thoughtfulness, borrowing and taking a loan out can be a great option right now, as long as you commit to paying your loan back on time. To ensure this, determine how long you’ll have to pay back the money you’ll borrow. It may help to study a bit about interest rates and the industry. After all, education is your best friend, especially when the stakes are high. 

Your interest rate will be based on the length of the loan, with shorter terms typically offering lower rates. 

Sure, under normal conditions it may be possible to run your business without any borrowing. But these aren’t normal times. The result is a healthier business that has the wherewithal to thrive into the future.

As long as you’re thoughtful with your loan’s use and commit to paying it back on time, it just might save your business. After all, the right business move and the best possible plan is the one that lets you come out stronger in the end. 

How to distinguish a smart loan from a foolish and costly business move? We know the distinction!