Figuring out what to do to protect your employees as they come back to work from time off due to COVID-19 health risks is a challenge every business owner has to deal with. It is not going to be cheap. So how do you fund your COVID-19 office improvements?
Many business owners have applied for SBA disaster relief loans, but what if you are one of the many whose loans don’t come through or don’t come through soon enough to get the office improvements done in time for the return of employees? How do you fill the gap?
Different Loan Options for Office Improvements
Office improvements are expensive and costly, and using your business cash flow to fund the improvements may not be an option. Applying for a loan is the next best option that you have. There are different loan options that you can use to finance your office improvements. Check the following list below and see what loan option best fits you.
Traditional Term loan
The traditional term loan is what you think it is. You apply for a lump sum of cash, and once approved, you will receive the amount in full. It is under the condition that you need to repay the whole amount together with the total interest and fees included over a specific period. Your repayment schedule condition depends on the lender, but you can choose to have it done on a weekly or monthly basis.
To qualify for a traditional term loan, you need to have a good credit score, outstanding business transaction records, and an increasing business revenue over the years. However, if this seems to be overwhelming, there are still other options, like short-term loans, that you can apply for.
Many lenders offer short-term loans to startup business owners that are looking for additional funds in handling their business expenses. One of these expenses includes renting an office space for their business operations including office improvements.
Short-term loans don’t need many requirements to get approved. Having a fair to good credit score should get you the approval you need. Also, short-term loans work best for startup business owners as they are still getting the hang of running their business. Handling the repayments for a short-term loan wouldn’t be too much of a burden to a recovering business.
A business line of credit
Any business can apply for a business line of credit. The good thing about having a business line of credit is that you can have a higher credit limit compared to other loan options. If you have excellent business revenue, a clean credit history, and other essential factors, you can avail of a high credit limit that you can use for your office improvements.
Another notable distinction of getting a business line of credit as a loan option is that it offers flexible payment options. Funds can also be used for different business-related purposes, and borrowers have access to cash on demand. Handling the payment for a business line of credit is much like paying for a credit card. You only need to pay for the interest of the funds you used.
It is very seldom that business owners rely on the use of their personal credit cards to finance any business-related expenses. The truth is, utilizing your credit card is a good financial option to fund your business. If the ideal, rentable office space you found can be settled by paying through your credit card, then you have a good deal.
However, make sure that you don’t overspend your credit limit. You don’t want to be burdened with monthly repayments and interest accumulation.
Pro-tip: In any business, it is inevitable to have a slow period during the COVID-19 crisis. The slow period might be one of the reasons why many business owners struggle to pay off their debts on time. If caught on a tight end in repaying your loan, you can do a balance transfer loan. A balance transfer loan can give you leeway as it allows you to transfer or move your debt to a different financial institution that has a zero or lower interest.
Before you perform a balance transfer loan, make sure to check the company’s terms of service. Credit card companies offer different terms, and some of them might not appeal to your preference. Find one with a very low-interest rate, no balance transfer fee, high credit limit to cover previous balances, and a long introductory period before proceeding to have a transfer done.