What is an essential industry?
An essential industry is a type of business that must stay open and available to the public. For example, during public emergencies, natural disasters, economic recessions, public health emergencies, pandemics and other types of crisis situations. An essential industry business loan is made by lenders specifically to vital industries. Complete list of Top 32 essential industry businesses
Lenders think these industries are less risky because they are always needed. Lenders still make business loans to these businesses because they are open and making money. Other businesses may be closed and do not have sales.
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How to get an essential industry business loan during Covid-19 Coronavirus. How to steps, direction and tips.
Step 1. Preparation:
Find programs and lenders that lend to your industry considered essential to staying open during emergencies.
Step 2. Prepare your information:
Tip: Look at all programs available under essential industries and choose.
Example: Business loans based on cash flow may still be available to your industry.
Step 3. Contact lenders that advertise small business loans to essential industries during the Coronavirus Covid-19
Be open to every program. Your business will often not qualify for the type of business loan you would like the most. Choose from
the programs you can get rather than what you would like to get.
Tip: Call if you can. Tell the rep what type of business loan you would like, but quickly focus and discuss with the representative the programs that you may qualify for.
You may be asked for documentation or stipulations as part of the loan. Some of the documentation may not be required until later in the process or before closing. This will save you time by not providing information now that won’t really be used for an approval or denial decision.
Step 4. Complete the application.
Provide any documentation you have that strengthens your request. This can include bank statements, tax returns, business or personal financial statements that may increase your chances for approval and the amount of any approval.
Step 5. Request closing documents.
Look over the closing documents. Look for affordability for your business, early payoff options, fees and collateral. Make sure you understand any conditions you have to meet during the term of the financing. This can including providing financials during the loan and consequences for non payment.
Once ready, provide all the documentation required for closing and complete.
FAQ Frequently asked questions on how to get an essential industry business loan
What is an essential industry?
An essential industry is a type of business that must stay open during public emergencies, natural disasters, economic recessions, public health emergencies, pandemics and other types of crisis situations. Their services are considered vital to the general public and must continue.
Lenders declined our small business loan because we are not an essential business. How can we still get a business loan?
There are other programs available now and your business does not have to be considered essential. This could be an asset based loan such as a loan against equipment, real estate or accounts receivables. Businesses that have very strong credit may still qualify.
Is it a waste of time to apply for a small business loan during covid-19 coronavirus or phase 1 and 2 if our business is not on a lender’s essential business list?
It is often not a waste of time to apply. There are industries that are in between essential and non essential. The list may be a guideline and some lenders will consider such businesses. Call and ask the representative. Even if you are not approved, you will be able to have a much better idea of the kind of what loans you in fact may still qualify for.
How do I tell the lender my business is essential?
Document all the aspects of service or product your business provides. Try to identify any of those that are essential to the public or community. Look up the NAICS codes to see if you can classify your business as essential. When applying provide the essential business activities to the lender.
List of 32 Top Essential Industry Businesses
Complete list of Top 32 essential industry businesses 1. Accounting Services 2. Assisted Living Facilities 3. Auto Parts 4. Auto Repair - mechanical and auto body 5. Delivery companies for essential needs 6. Drywall companies 7. E-Commerce Businesses 8. Electricians 9. Exterminators 10. Food delivery 11. Food takeout 12. Food distributors 13. Funeral Homes 14. Gas stations 15. Grocery and Convenience Stores 16. Gun stores 17. Healthcare operations 18. Home Healthcare Services for adults, seniors or children 19. HVAC 20. Insurance agencies and offices 21. Legal Services 22. Liquor Stores 23. Medical offices 24. Pharmacies 25. Plumbers 26. Restaurants with 50% takeout or delivery 27. Takeout Food Establishments 28. Trash collection 29. Tire sales, repair and installation 30. Trucking and Transportation support of essential support of residences 31. Utility and telecom 32. Veterinary clinics
Top 6 Fastest Business Loans available during Covid-19 Coronavirus
1 Cash flow loans or bank statement loans for Essential industries
2 Loans against vehicles or business vehicles
3 Paycheck protection program – PPP CARE
4 Business loans on Equipment
5 Advances on accounts receivables
6 Loans on Commercial Real Estate
Top 6 business loan requirements during and after the Covid-19 Coronavirus lockdown
1 Month to date MTD business bank statements or verification of revenue. For the current month the most recent bank activity since the 1st of the month. A correct month to date includes all debits, credits and daily balances.
2 Current months and near term business revenue forecast. A forecast of what you believe the business is expected to do in the next 30 days and up through 90 days and beyond. Anything that supports the forecast can be helpful. This can include sales contracts or new customer lists.
3 Modest or sustainable fluctuations in business revenue. If your business sales have been down approximately 25% or less then show this. Sales drops of up to 30% to 50% may still allow for funding on a case by case basis.
4 Longer time in business. Time in business of 5 years or longer may be required for unsecured requests during the height of the virus. Other requests will require less time in business especially after Covid-19 also called post-covid-19 coronavirus.
5 Higher credit scores. Over 600 in many cases. Previously, scores as low as 500 or lower were allowed. In the short term as the virus lockdown eases up and businesses work their way towards normal sales, lower scores will be accepted again for certain financing programs. Some secured programs will currently accept lower than 600 scores.
6 Collateral. Collateral will be required for some business loan programs that continue to fund now and while the virus covid-19 begins easing. These programs may require real estate, equipment or accounts receivables.