The COVID-19 pandemic has created a significant economic downturn. That’s a fact. But what’s also a fact is that economic downturns create significant opportunities for business owners who have the wherewithal to take advantage. And this downturn is no different.
If you’ve got cash—or the availability of cash—here are three investments to consider.
Real Estate
When people say it’s all about location, location, location, they’re absolutely right. The strength of the property market really does depend on where the market is, what industries are located nearby and the social and financial demographics of the local population. But, regardless of location, the downturn has and will continue to affect many commercial properties nationwide. Why?
More businesses have discovered that working from home actually works and, over the next few years, will also realize that they have too much office space. Retailers across the country have suffered. Many movie theaters and event venues, struggling to fill seats even before the outbreak, will consider this the last straw. Other companies are struggling to fill their facilities. The residential housing market will continue to grow, but commercial property markets are challenged.
Property values will decline in many areas, and that presents an opportunity if you’re looking for warehouse or production space. Consult a commercial real estate broker and plot your strategy.
Inventory and Equipment
Some surveys are predicting that hundreds of thousands of small businesses will go out of business as a result of the pandemic. Other predictions are even more dire. There’s no way to tell if this is true, but one thing’s for sure: bankruptcy attorneys are going to be busy. This isn’t good news for those small business owners or for the economy, but it does present opportunities for businesses looking to snap up equipment and inventory.
If you’re in the market for that special machine—a used printing press, a forklift with low miles—then you should start looking now. Just Google “used equipment for sale near me” or visit online sites like MachineryTrader.com to see what deals are available. Do this daily as more deals become available. Also, look for auctions in your area. They will be growing in number.
Mergers and Acquisitions
According to BizBuySell, a marketplace for businesses looking to buy and sell, there is now a “lifetime opportunity” for business acquisitions. Many baby boomers have already been looking to get out of the game and retire prior to the pandemic and now, after struggling through the ordeal, want out more than ever. Other businesses—struggling for any number of reasons—may have also been pushed over the edge by the economic downturn.
This presents a great opportunity for any other business owner looking to expand or for an aspiring entrepreneur with a little capital who is looking to start his or her own company. Talk to a business broker, go to BizBuySell or ask around in your local trade association.
One final piece of advice: There is a great financing deal available for small businesses. Included in the CARES Act is a provision that will forgive the first six months of principal and interest payments on any new Small Business Administration Section 7(a) loan closed before September 27, 2020. The loan proceeds can be used for real estate, business acquisitions, assets and even working capital.
These are hard times for many, but for those who have capital and gumption, these are also times to do deals.
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View Comments (19)
It is my understanding that SBA loans are available through a bank/financial organization and insured by SBA. I believe there are several different types of SBA loans at different rates and time frames. Currently, rates tend to be lower than at other times.
Who has the best payroll provider during these difficult times. For a small business that processes the R&D tax Credit on each payroll?
Thank you,
JDD
I own a janitorial cleaning company and we are trying to hold our own luckily with some essential customers which has been keeping us afloat, but I am interested in that SBA 7A loan
I am trying to cancel my account. COVID has put my group out of business and we are not resigning our lease. I need to cancel my renter's insurance as of August 1, 2020.
Same question as Corey Hills above, does anyone know how to apply for the SBA 7a loan ref'd last paragraph article? Is this thru the SBA or your own bank but funded thru SBA? Please advise & thank you.
My employment as a software developer with a B.S. in Computer & Information Systems was erased in 2001 by the H1-b virus that came from India. Spent the next 15 years working low level , low pay jobs until I could sign up for Social Security.
Now everyone has to scramble just as I did.
Great article! Thank you for the valuable insight.
We're a small business in Nashville that helps businesses generate revenue by creating online learning experiences.
We'd love to help if we can. Please reach out with any questions: http://www.thinkthru.co
I am one of the owners a small business, Uninked Laser Tattoo Removal. Prior to Covid-19 we completed our FDD Documents and were ready to sell our first Franchise. Looking for ways to advertise without breaking the bank so we can take the company from a single brick and mortar location to multi location.
Great opportunities! Thanks.
I hadn't been thinking about commercial real estate, but I bet there are some really good deals out there too. I'll have to take a look. I was very surprised to see our both our primary resident and rental home have gone up about 10% in value according to Zillow. I wonder why?
I've also found a decent amount of business equipment for sale on Craigslist under "for sale > business".
Great advise. Looking forward to challenge this epidemic with a solid basis of SCIENCE . Hope new ideas will flourish.