COVID-19 led to a huge spike in eCommerce. Why? Millions of Americans started to work, exercise, eat, and entertain themselves without going out of their homes. However, COVID also resulted in the closure of a huge number of businesses. Many people were looking to open a new business. That’s where business funding like a cash advance came into play.
COVID Business Boom & Shock
The COVID-19-related situation proved to be beneficial for some business sectors like eCommerce, while it was devastating for others. So many businesses closed their doors forever. Lots of new ones were launched all of a sudden. Specifically, entrepreneurs opened over 500,000 new businesses from mid-2020 to mid-2021 as compared to what was registered from mid-2018 to mid-2019.
COVID-19 facilitated the way suppliers, investors, and sales contacted. The move to work-from-home, remote, distributed, and direct-to-consumer business models got accelerated. On the other hand, brick-and-mortar restaurants got hurt severely, and delivery boomed.
As for gyms and yoga studios, these businesses were impacted negatively, but the interest in personal fitness equipment rose. When it comes to the healthcare and banking sectors, these were battered but not killed, as McKinsey analysis shows.
COVID-19 Impact on Insurtechs & Fintechs
When in the spring of 2020 the shutdowns were still continuing in the U.S., over 3 million businesses ceased to operate. The latter half of 2020 witnessed a surge in the applications for new businesses. This was the highest rate that the 17 years’ data from the government showed, according to the University of Maryland.
Many business owners fell into a challenging situation concerning their loan payments. Others are starting to look for access to additional working capital to keep their doors open. Insurtechs and fintechs were two of the most responsive companies to customers amid COVID-19. These were the first to offer COVID-related products.
That’s where reputable business funding providers stepped in. There was a significant increase in the number of merchants applying to alternative online lenders to get quick access to funding such as a cash advance. If you’re interested in this type of financing, make sure you’re applying for reliable and low cost services.
COVID-19: Opened & Closed Businesses
The COVID-19 related lockdowns and other measures hit businesses in a way that many weren’t able to withstand the shock. Lots of merchants needed access to financing such as a merchant cash advance.
Author Bio: Michael Hollis is a Detroit native who has helped hundreds of business owners with their cash advance solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.