Business loans for startups in 2020
COVID-19 has changed the business lending landscape – but how have startups been affected? Learn more about financing options for your new business.
COVID-19 has fundamentally changed the business lending landscape, but what does that mean for new startups? We look at the state of loans for new businesses in 2020, including financing options and eligibility criteria for startups.
So, according to Startup News, lending for new businesses has taken a backseat while banks and lenders manage a great wealth of requests for loan repayment deferrals and new working capital for businesses looking to bridge gaps in cash flow. Furthermore, the current uncertainty around the wider economic outcomes of the pandemic may present challenges in predicting new businesses’ ability to service their debts.
In the medium- to long-term, however, startup lending may be more likely to pick up momentum again as the economy begins to recover and the backlog of debt deferral requests subside.
When assessing startup loan applications, lenders may look at:
Applicants more likely to be successful are those who can demonstrate a sound business plan and the ability to service their loan.
Even if you aren’t eligible for a new business loan at the moment, there are several other potential ways to help you manage cash flow and finance growth for your new business, such as:
It can be tricky to wrap our head around loans and financing when you’re starting out in business, so it’s a good idea to chat to a lending specialist who can help you understand what you may be eligible for.
This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business.