Few business plans have remained unscathed by the COVID-19 shutdown. But as parts of the Australian economy continue to re-open, how can small businesses make sure cash flow issues don’t prevent them from not only getting back on track, but hitting the ground running?
While the impact of the shutdown has varied dramatically across different industries, many small businesses are looking at depleted balance sheets or uncertain pipelines at a time when they want to be investing in everything from hygiene screens to ecommerce development.
As different parts of the economy start to reopen, many businesses are looking at how they can regain their lost momentum, says Prospa Co-Founder and Chief Revenue Officer, Beau Bertoli.
During this time, Prospa has been well positioned to further support the many thousands of small businesses impacted by COVID-19 and help them to get back on their feet.
“As businesses start to reopen, they may need funds to purchase stock or buy equipment,” Bertoli says.
“We’ve had businesses that are using this time for fit-outs and need funding to make that happen, and of course some sectors are experiencing increases in demand, like online retailers and transport, due to the spike in deliveries.”
Getting back to business
At Prospa, we work exclusively with small businesses, so we know the challenges that many have faced throughout the pandemic. And just as we’ve always done, we continue to support small business. As a participating lender in the Government’s Coronavirus SME Guarantee Scheme, we’ve created two new products: a Back to Business Loan and a Back to Business Line of Credit – available until 30 September 2020.
With both products, approved businesses can access funding of up to $250,000, possible in less than 24 hours, so you don’t miss a major opportunity. And the best news? No repayments for six months, along with a quick and easy online application process*.
How businesses are putting Back to Business finance to use
Professional services
For many operations, the pandemic disruption has prompted forays into new markets, new products and new opportunities, helping them not only find fresh sources of revenue but also making their businesses more resilient in the long run.
That was the case for Troy Deighton, Director of media agency Black Chook Media, who used a Prospa Back to Business Loan to do just that.
“The funding has given me the ability to get a new revenue stream off the ground during a period where my cash flow has been impacted,” he says.
Meanwhile, even firms that haven’t diversified are finding a cash boost handy for helping get their momentum back as parts of the economy hum back to life.
Take one law firm specialising in conveyancing for example. Business had slumped almost to a standstill, leaving them with little income for several months. But with work quickly picking back up, they turned to Prospa for cash flow support to help them meet advertising costs and payroll.
Building and trade
For commercial pool tiler On Time Developments, the shutdowns have actually been a boon, as aquatic centres took advantage of the mandatory closures to complete overdue renovations.
Using materials imported from Germany, On Time Developments found itself needing extra stock to take advantage of the sudden influx of new job opportunities, which meant paying for it upfront.
The quick turnaround on their Back to Business Loan meant they had the confidence to say ‘yes’ to enough work to keep them going for the next 18 months. Read their full story here.
Food and hospitality
The hospitality sector has faced some of the biggest disruptions to business as usual, but with some cafes and restaurants steadily reopening, many are looking at how to ramp back up quickly.
Some suburban cafes are finding themselves winners out of the work-from-home revolution. The surge in demand combined with social distancing regulations has prompted one restaurant to use a small business loan to take over the lease on the empty shop-front next door and fit it out to give them the space to service all potential customers.
Similarly, one greengrocer found that their business had boomed enough to give them the opportunity to purchase another business. They weren’t able to obtain the required funds elsewhere, so they got top-up funding in the form of a Prospa Back to Business Loan.
Wholesalers and retail
Meanwhile, others are seeing reduced demand leading to their wholesale suppliers offering deep discounts. Sharp operators have been knocking on Prospa’s door to get loans to help them stock up on key supplies on the cheap, aiming to set themselves up for higher profit margins as trade returns.
On the other hand, a wholesaler looking down the barrel of much longer lead times on imports might decide to hedge their bets and pay up front for bulk orders now, so they aren’t left short when demand increases.
It’s also worth keeping in mind that, as part of the Federal Government’s economic stimulus, any assets worth up to $150,000 purchased before the end of 2020 can be instantly deducted.
*Eligibility and approval is subject to the Government’s Coronavirus SME Guarantee Scheme eligibility criteria and standard credit assessment. Not all amounts, term lengths or rates will be available to all applicants. Fees, terms and conditions apply. The scheme ends 30 September 2020.
