3 methods to build working capital during COVID-19
COVID-19 has hit all of us hard, with many businesses both large and small having to cut costs or even temporarily shut down. To help you stay afloat during this tough time, we’re taking a look at three of the most common methods to help you manage loan repayments, keep staff employed and maintain cash flow.
Step 1: Speak with your financier
If you’ve determined your primary issue will be meeting your debt obligations, your first step should be to speak with your lender. They may be able to work with you to find an alternative arrangement for your loan repayments. This might include deferring payments, reducing payments, or changing the timing to better suit your needs.
Remember, your business lender is on your side: they want your business to succeed financially just as much as you do. Keep in touch with them if you’re running into trouble.
Step 2: Apply for the wage subsidy
The wage subsidy is available to all kinds of businesses at the time of writing, self-employed people included. This is designed to help you keep people employed while also mitigating the damage of the COVID-19 economic slowdown. If you qualify, you can receive up to $585 a week for each full time employee.
However, there are quite a few criteria and processes you have to follow to qualify. You can find more information at the dedicated government site.
Step 3: Apply for a government-backed loan
During uncertain times, banks tend to tighten up their business finance, making it harder to get the capital you need to keep going. However, the government has announced a Business Finance Guarantee, working with the major banks to take on some of the risk, making it easier for businesses to get loans.
Alternatively, non-bank lenders and finance companies may have a higher risk appetite than your existing bank, so don’t be afraid to branch out if the banks can’t give you what you need.
COVID-19 has hit many hard working kiwi businesses hard, but by talking to the right people and making careful decisions, NZ businesses can work their way through. For more information on business loans and cash flow finance, get in touch with the team at GetCapital.