Small Business Trends and Predictions for 2021
Keep an eye on these small business trends and
predictions for 2021:
- Lending programs related to COVID-19 will be key, but they are not sufficient.
Alternative sources of funding will be needed as well to meet business owners’ capital
needs in 2021. - Digital marketing spend is likely to increase, as traditional marketing and PR gets a
facelift in 2021. - Small businesses will drive the adoption of developing technologies, and AR/VR will
come into their own as the COVID-19 pandemic continues into 2021.
With 2020 in the books, small businesses are optimistic that 2021 will be a brighter year. While
the COVID-19 pandemic is not yet gone for businesses across the U.S., that optimism is buoyed
by the distribution of vaccines. Although the pandemic has been front and center since early
last year, there are other trends on the horizon for entrepreneurs to watch as well.
Finance
The Paycheck Protection Program will buy many small businesses.
The economic impact of the COVID-19 pandemic has depleted many businesses’ cash reserves.
Although many states reopened after initial shutdowns, some are reimposing restrictions,
reigniting concerns around cash flow and the survival of small businesses. The recent $900
billion stimulus bill included additional funding for the Paycheck Protection Program (PPP),
which was established last year under the Coronavirus Aid, Relief, and Economic Security
(CARES) Act.
“Small businesses should try to take advantage of the new stimulus bill, including applying for a
new PPP loan,” said Chris Wilcox, Managing Partner of commercial lender Premier Business
Lending.
Small businesses will again have the opportunity to receive forgivable loans under the Paycheck
Protection Program, which has received $284 billion in additional funding as part of the $900
billion COVID-19 relief and economic stimulus package. The new PPP loan program comes with
several new rules and hopes of a streamlined application and forgiveness process. Whether this
will be your first or second time applying for a PPP loan.
Alternative sources of capital will fill unmet funding needs.
For many other business owners, loans might not be an option, especially if they incurred
significant financial loss during the COVID-19 pandemic. In those cases, alternative sources of
funding, such as alternative lenders or investors, might be critical to attaining much-needed
funding for many entrepreneurs.
“Alternative sources of capital will likely also play a pivotal role in keeping businesses solvent,”
Wilcox said. “Alternative sources would include … grants, fintech, venture capital, angel
investors, peer-to-peer lending and crowdfunding to name a few. These are important, because
many businesses that actually need the capital will not be able to meet the requirements of
traditional funding sources due to the negative impact [the COVID-19 pandemic] has had on
their balance sheets.”