The U.S. and China have appeared close to a breakthrough before in their trade war, only for negotiations to ultimately crumble, sparking a new round of recriminations and global economic turbulence. The impasse creates an opportunity for the payment companies and other firms that provide merchant credit.
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As entrepreneurs stare down what could be a protracted trade impasse, many are planning to increase prices, with 64% of small business owners saying in a recent
The trade dispute has impacted payments volume, since most small businesses lack the pricing power that would enable them to keep customers while asking them to pay more. That’s why entrepreneurs should strongly consider applying for financing to see their small businesses through the trade war while minimizing customer churn. And many payment companies and financial institutions offer credit for merchants and other businesses, so there are several options to mitigate the trade war.
A line of credit provides small businesses access to funds that they can draw on as needed.
Even young businesses with low credit scores have the potential to qualify for a line of credit, and with many options for quick approval, it can be an efficient solution for business owners seeking to minimize the pain from the hit to their bottom lines.
Business equipment loans are another option. A quick inventory of most small businesses’ equipment would help underscore why the trade war matters even for mom and pop shops who aren’t in the business of importing and exporting goods. That’s because so much business equipment – electrical machinery, computers, furniture, signage, and much more – is sourced from China.
Taking out a business equipment loan can help cover the increased costs of these purchases. What makes this option particularly attractive is that the equipment itself serves as collateral for the loan, with no further security required.
A growing number of online lenders and fintechs provide unsecured loans to small business – meaning that business owners don’t need to offer any collateral to secure the loan. Approval rates are high, the decision process is efficient, and the funds can be used for any business purpose.
As businesses navigate the trade war, these loans can help cover anything from inventory to office supplies – any area where a business is taking a hit.
There’s no getting around it: It would be far preferable for businesses not to have to resort to financing options simply to come out of the trade war above water.
But there’s also no getting around the reality that the trade war is likely here to stay for at least several more months – and for businesses to survive it, the recipe for success is the same as it was long before the trade war’s opening salvo: Put customers first, and win out over the competition on price, service, and quality.
Without a doubt, that’s a more challenging task in the current climate, but with a variety of financing options available to them, business owners can minimize price increases, retain and even attract customers, and cushion the impact of the two superpowers’ trade dispute.
