Is now a time to start a business

There are lots of reasons why a recession can actually be good for business startups. As a responsible lender, we aren’t going to pretend that every business will succeed in the current climate of financial uncertainty – as they don’t at any other time, either. Recessions cause problems that people need solutions to. And Coronavirus has caused a very specific set of problems that startups are clamoring to cure.

1. The cost of great talent drops in recessions and it’s actually easier to hire people, and finding better talent for cheaper rates allows entrepreneurs to create a better product for less money. I also suggest looking internationally for talent. It can be daunting to get it set up. But once you do and you figure out recruiting, onboarding and operations, hiring internationally is much less expensive.

2. It might seem counterintuitive, but economic uncertainty creates a great environment to seek funding. Interest rates are lower, which means loans are more affordable. And savvy investors use a downturn to get more for their money by investing in cash-strapped startups.

3. Many businesses will find themselves with less competition as competitors struggle to restart after the pandemic. For those that are able to innovate or borrow to survive the storm, this can be an advantage when they re-enter the marketplace.

4. I urge entrepreneurs to think differently when developing new businesses or products as the world is not going to be the same when we come out of this pandemic. The advantage that early-stage companies have is they’re much more nimble and can move much more quickly and respond to these opportunities better than the incumbents who are now currently trying to lay people off or really worry about the future.