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Dynamic Financial Planning in the Midst of a Recession

Dynamic FInancial Planning in the Midst of Covid-19

You didn’t build your small business in a day. Every small business that succeeds is an ongoing process of strategy and growth to thrive in this new digital era. The glue that holds together that process is certainly financial planning and the ability to manifest strategies that produce success. However, amid COVID-19 and an ambiguous economy, it’s difficult, if not impossible, to adequately plan for the future. Therefore, it’s crucial to have a dynamic business plan to account for multiple variables across different timescales.

This article will not attempt to predict any future forecasts. The focus will be to give small business owners better tools to account for and predict future scenarios while offering competitive loan options to cover multiple bases in the face of complex possibilities.

The Economic Impact of COVID-19

Having a business plan is a crucial part of every business’s trajectory to success. However, no plan can adequately cover all unseen variables and account for disasters that may arise. We’re currently in a long-term and economically far-reaching pandemic that has devastated many and upsets the financial balance of businesses globally.

In a paper published by Schlomo Maital et al. evaluating the global economic impact of COVID-19, they establish that the virus affects the economy in three primary ways. First, COVID-19 directly disrupts the production of raw materials. Further, the virus influences the entire supply chain distributing those goods to their given markets. Finally, the pandemic has severely undercut the market’s demand for many goods and the ability of consumers to purchase said goods.

In short, COVID-19 has far-reaching consequences for the entire chain of supply/demand while disrupting previously established precedents for the value and distribution of products. While the news is not hopeful, many small businesses continue to thrive and adapt to new conditions. The key is adaptation and evolution through dynamic business plans.

 

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The Importance of Financial Planning for Thriving Small Businesses

In 2022, more than ever, financial planning is crucial for success. While success means different things for every business, success is always measurable and repeatable. Having a financial plan means quantifying the metrics that help your business succeed, such as sales or site traffic, and allows you to target approaches that improve those metrics.

Financial planning gives your business an overview of its financial health. You can directly assess your current situation to determine the strengths and weaknesses of your business. Further, it allows you to develop your small business with a specific and prepared approach. Thus, you can dial in on successful metrics to improve and think long-term about the growth and direction of your business.

Dynamic Financial Planning and Tips to Succeed

Where financial planning establishes the health of your business and develops a solid plan to succeed, dynamic business plans subsequently account for multiple unforeseen variables and formulate various strategies to account for these variables. The fact is, we live in historic and unprecedented circumstances. The inability to forecast the future subsequently leaves small business owners unconfident about their ability to stay afloat.

Usually, developing a financial plan involves consistency and accuracy to account for upcoming variables. This consistency likewise allows for the execution of time-sensitive decisions and critical investments. In the face of our current pandemic, small business owners will need to redefine their success metrics once viable metrics are no longer reliable. Further, entrepreneurs must develop multiple scenarios that account for worst-case scenarios and allow the business to adapt to unforeseen economic events.

With new metrics and multiple scenarios to employ, the business can then determine a direction. Before a company would have a step-by-step plan to achieve a given goal, the business direction determines the purpose with a loose network of flexible strategies that it can utilize depending on the situation.

While dynamic business plans are more complicated than traditional business forecasting, they allow for a more flexible approach to uncertain events. The plan’s purpose is to achieve a goal through measurable and consistent means. What becomes more complicated is the variability of the means and the metrics to measure. However, you can cut through the complexity while maintaining a dynamic financial approach by applying for suitable loans.

Supplement Your Financial Planning with the Right Loan Options

If you’re a small business owner with excellent credit and a proven track record, the best way to stay on track is with financial supplementation with the right loans. Short-term loans help deal with seasonal discrepancies. However, for success with dynamic planning, longer-term loans are exceptional financial supplementation over multiple years of economic opacity.

Mid- and long-term loans give an extensive reservoir of revenue to invest in the business itself, meet the needs of your dynamic strategy, and most importantly, cover unforeseen consequences of multi-year disasters such as COVID-19. In short, these loans provide financial security to ensure your business meets its goals.

 

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 When applying for these loans, it’s crucial to understand the trends of short vs. long-term loans. The quicker the loan, the easier it is to qualify for, but the higher the interest rate. Longer loans sport lower interest rates but require better credit and business income to receive eligibility.

Mid-Term Loans

Midterm loans offer a premium on flexibility for whatever your business needs. Shorter-term loans are excellent if you require a quick fix, but mid-term loans provide you the freedom to get ahead of problems and prepare. You can grow your business, obtain working capital, hire, refinance the debt or have a liquidity reserve for unforeseen events. Midterm loans last 12-60 months, offer $25k-500k, and have 6.5%-20% APR. These loans are best when you want to finance something big with a lower APR and better ROI than a short-term loan.

Finally, you’ll need at least two years in the business to qualify, making >250k in annual revenue with a 650+ credit score.

Long-Term Loans

As the name implies, long-term loans offer the longest and largest payment plans available. In addition, these loans can go from 1-25 years with competitive (6.5%) APR and affordable monthly installments. Because these loans are competitive and affordable, they have a challenging application process and requirements for approval. While each loan varies, we recommend businesses with a 700+ credit score that have been in business for at least four years apply for these loans.

While the application process can be intensive, online lenders such as BitX Funding can assist your business in getting the best possible financing in the shortest time. If your small business qualifies for long-term loans, it certainly remains the best option for building credit, getting fantastic ROI, and preparing for an unpredictable future.

Stay on Top of Your Business Plans today with BitX Funding

In the midst of COVID-19, we live in a historic and unprecedented time. Before we could account for and prepare for the future with financial forecasting, we now reside in an unpredictable environment. Moreover, small business owners must adapt and thrive in this new environment.

 

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 A responsible and effective way to adapt is by using dynamic financial planning to diversify your business strategies while remaining true to a central goal you work towards. The best way to aid that plan is with longer-term loans that allow you to invest in your business’s growth while accounting for unforeseen events. While mid- and long-term loans require better credit scores, annual revenue, and underwriting process than shorter loans, these loans offer significantly better ROI and financial security.

The best part is, that BitX Funding can assist you through the process and get you approved for your next long-term loan within days!

For more information on mid- and long-term loans, contact BitX Funding by phone, email, or by filling out the form below.

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