How to increase cash flow during the coronavirus outbreak

Small businesses likely need to consider both short- and long-term solutions to cover operating expenses during the coronavirus outbreak. The government has started offering low- and no-interest financing to small businesses affected by COVID-19. But you might also need to apply for more traditional financing to tide you over as you wait for these government applications to be processed.

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Requirements	Documented payroll costs — like 1099s and W2s In business since at least Feb. 15, 2020 To qualify for forgiveness, must use funds for payroll, existing mortage interest payments, rent, leases and utilities

9 ways to increase cash flow during the coronavirus outbreak

Business line of credit

A business line of credit gives you access to a credit limit that runs anywhere from $5,000 to $5 million in some cases. Rates can start at around 8% and go as high as 80%, depending on your business’s financials and your credit score. Once you’re approved, you can access cash as needed — usually no later than the next business day.

This makes it ideal if you expect to need funding, but aren’t sure how much or how long that need will last. It can be less expensive than a credit card in some cases. And it can cover a wider range of expenses, like rent and utilities.

Find a business lines of credit

Online business loans

Online business loans can get cash in your bank account as soon as the same day, depending on the lender. These tend to run from $2,000 to $500,000 with rates from 6% to 60% APR depending on the lender, your credit score and business financials.

Online loans are faster and easier to qualify for than their bank counterparts. But they tend to come with higher rates than other loans. And some come with daily or weekly repayments, which can be inflexible if you’re struggling with cash flow.

Compare loans for businesses affected by the coronavirus

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Name	Product	Filter Values	Loan amount	Starting APR	Requirements
Lendio			$500 – $5,000,000	6%	Operate a business in the US or Canada, have a business bank account and have a personal credit score of 675+.	Submit one simple application to potentially get offers from a network of over 75 legit business lenders.	Check eligibility More Info		loading Fetching your data...
SmartBiz			$30,000 – $5,000,000	4.75%	650+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years	Get funding for your small business with a government-backed loan and extended repayment terms.	Check eligibility More Info		loading Fetching your data...
Kabbage Paycheck Protection Loan			Up to $10 million for 7(a) loans, $1 million for Express loans	1%	No requirement to prove you tried and failed to get credit elsewhere	Check eligibility More Info		loading Fetching your data...

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Business credit cards

Many business credit cards come with an intro APR of 0% for the first six to 18 months — if you can qualify. This gives you access to interest-free financing, as long as you’re able to pay off the balance before the interest rate kicks in.

If you don’t think you’ll be able to pay off the balance before that date is up, a loan or line of credit might be less costly, since they tend to have lower rates. You’ll also generally need excellent credit and a strong history of business financials to qualify.

Business insurance claims

If you already have a business insurance policy, reach out to your provider to find out what’s covered during a pandemic. If you’re already covered, you could receive a claim to help cover operating costs. The size of your claim depends on factors like your location, the size of your business, what industry you’re in and the insurance company you’re working with.

You could also explore a specialist insurance policy. A handful of companies are offering pandemic policies to help businesses hit hardest by the coronavirus, like James Allen Insurance. These include healthcare, hospitality and retail companies.

Don’t already have insurance? Starting a new policy now won’t help — you won’t be covered for events that happened before you had insurance.

Invoice factoring

Invoice factoring involves selling unpaid invoices from other businesses or government contracts at a discount to a factoring company. Typically, you receive between 80% and 95% of your unpaid invoice balance up front, and then the rest minus a fee as the invoices are filled. Generally, it’s more expensive than a term loan or credit line.

Invoice factoring might be costly, but it could be easier to qualify for since eligibility depends on your clients and their invoices. It also doesn’t involve debt repayments, which can hamper your business as it tries to recover from a loss in revenue. But it can take anywhere from a day to a few weeks to get your funds.

Compare invoice factoring providers today

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Name	Product	Filter Values	Min. Amount	Max. Amount	Requirements
Interstate Capital Factoring			100% of your unpaid invoices	100% of your unpaid invoices	Business in good standing with no existing tax liens	Free up working capital with an advance on up to 100% of your unpaid invoices.	More Info		loading Fetching your data...
BlueVine Invoice Factoring			$5,000	$5,000,000	530+ personal credit score, 3+ months in business, $100,000+ annual revenue	Invoice factoring with the flexibility to fund only the invoices you choose.	More Info		loading Fetching your data...
Lendio			$500	$5,000,000	Operate a business in the US or Canada, have a business bank account and have a personal credit score of 675+.	Submit one simple application to potentially get offers from a network of over 75 legit business lenders.	Check eligibility More Info		loading Fetching your data...

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Consider nonrecourse factoring

When exploring your options, try to find a lender that offers nonrecourse factoring. This means the factoring company takes the loss if your invoices aren’t filled. With recourse factoring, your business is responsible for paying back the funds if your customer doesn’t fill their invoice in time — which is highly possible during the coronavirus outbreak. Nonrecourse factoring tends to come with higher fees, however.

Government financing

The federal, state and local governments have started offering interest-free and low-interest financing to small businesses impacted by the coronavirus outbreak. For example, the Small Business Administration (SBA) is offering two types of offering low-interest loans to cover overhead costs: SBA disaster loans and Paycheck Protection Loans.

Apply for a Paycheck Protection Loan today

Below is a list of online lenders offering SBA Paycheck Protection Loans. We recommend applying as soon as possible, since funds are available on a first-come, first-served basis.

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Name	Product	Min. Credit Score	Turnaround Time	Required Documents
Fundera Paycheck Protection Loan		No minimum credit score	Varies by demand	Documented payroll costs — like 1099s and W2s.	Check eligibility More Info		loading Fetching your data...
Lendio Paycheck Protection Loan		No minimum credit score	Varies by demand	Documented payroll costs — like 1099s, W2s, average monthly payroll expenses, payroll report for 2019 and 2020. Must provide number of employees, driver’s license or other government-issued ID, or 2019 IRS Form 941 or Form 944.	Check eligibility More Info		loading Fetching your data...
National Business Capital Paycheck Protection Loans		No minimum credit score	Varies by demand	Documented payroll costs — like 1099s and W2s.	Check eligibility More Info		loading Fetching your data...
Kabbage Paycheck Protection Loan		No minimum credit score	Varies by demand	Documented payroll costs — like 1099s, W2s, and monthly payroll statements. Must include proof of business start date.	Check eligibility More Info		loading Fetching your data...

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Negotiate with suppliers and creditors

Many lenders and credit card companies are waiving fees, deferring payments and offering other financial assistance to help businesses cope with the financial fallout of the coronavirus outbreak. But many of these are only available on a case-by-case basis, so you’ll need to call to learn what your options are.

Suppliers might also be willing to negotiate new payment terms to make sure they don’t lose your business. But get in touch as soon as you can. Skipping payments without communication can hurt your relationship with your supplier — and hurts its ability to run its business.

Cut back on expenses

Go over your business’s balance sheet to see where you can cut back. Especially if you’re paying for something that you no longer need if you have employees working from home — like a corporate Seamless account. After you qualify for financing or see an uptick in revenue, you can start adding back programs if they make your business operations run more smoothly.

Business grants

A handful of local governments and private companies are offering them as of March 19, 2020. If you need a grant, look locally — many are only available in specific geographic areas and have business size requirements. For example, New York City is offering grants to businesses that have fewer than five employees. Amazon is offering grants to businesses within a few blocks of its three campuses in Seattle with fewer than 50 employees.

Check with your local department of business and large corporations in your area to learn about the options available to you.

Private and government grants to help your business during the coronavirus outbreak

5 tips to manage your cash flow

These strategies can help you make sure you’re getting the most out of your sales.

1. Discount early payments. Provide an incentive for your clients to pay ahead of time by offering a discount. You won’t bring in as much, but it could avoid the need for costly financing.
2. Sell equipment you aren’t using. Instead of letting old equipment sit around, turn it into a profit — or trade it in if you’re applying for financing and it’s an option.
3. Ask for a deposit on orders. To avoid that gap between receiving an order request and payment, ask for customers to provide a deposit of at least 50% on large orders. This can help cover production costs and avoid the need for financing.
4. Negotiate costs and terms. When possible, give a counter offer when ordering supplies or renegotiate the terms of payment to better fit your business’s monthly cash flow.
5. Offer subscriptions. A subscription can translate into more consistent revenue than one-off sales.

WATCH: How your business can survive the coronavirus

Bottom line

There’s a chance you’ll need to combine multiple types of financing to cover your operating costs during the COVID-19 outbreak, since the low-cost options take a while to come through. But communicating with your creditors and suppliers right away is key — they might be able to adjust your repayments so you don’t have to borrow as much.

Read our guide to business loans to find other options to apply for today.

Frequently asked questions

• Do I need good credit to get a business loan during the coronavirus outbreak?

  Not necessarily, though it depends on the lender. Many private lenders still have the same credit requirements. But the SBA doesn’t mention personal credit requirements for its disaster loans. And lenders like FundRocket are offering 0% interest loans with no credit check or collateral required.

• Are there resources to help me avoid layoffs besides financing?

  Yes, check with your local Rapid Response team. Rapid Response is a part of each state’s Department of Labor and can guide you through the options to avoid permanent layoffs.

  For example, the federal government recently expanded unemployment insurance to help businesses continue to offer workers a salary while operations have slowed or completely stopped. Many states are also expanding access and waiving requirements.

• Are traditional SBA loans available during the coronavirus outbreak?

  Yes, the federal government is still backing loans through the SBA loan program. But they can take a lot of time and resources to process if you’re looking for larger amounts, which clock in at around $5 million.

  If you’re looking to borrow less than $350,000, you may be able to get your funds faster through the Express Loans program. Especially if you use a service like SmartBiz that helps with a lot of the paperwork for you — for a fee.