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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Business Loan Success Story: Star Light Electronics Bets Against Coronavirus

Updated on:
Content was accurate at the time of publication.

Star Light Electronics dba Electro Sound
Englewood Cliffs, N.J.
Employees: 8
Year founded: 2001

As the coronavirus (COVID-19) spread through China, business owner Jonathan Lane waited weeks to receive shipments of the remote controls and other consumer electronics he manufacturers overseas and sells in the U.S.

With factories closed because of the outbreak, it set off a chain of events that would leave Lane unable to cover payroll and other ongoing operating expenses. He thought about applying for a bank loan but needed funding fast.

Lane applied for a business loan through SnapCap by LendingTree, which connects entrepreneurs with online business lenders. At the end of February, Lane took out a $200,000 loan through OnDeck, an online lender in the SnapCap marketplace, to keep New Jersey-based Star Light Electronics running. Star Light Electronics does business as Electro Sound — Lane is its CEO.

“We found ourselves in an unfamiliar situation,” he said. “[Getting] the loan is about making sure that we are still going to be here, that we’re still going to be in business.”

Managing the unexpected

When the crisis hit, Lane was already prepared for the usual manufacturing slowdown during Chinese New Year. But he wasn’t prepared for an indefinite business interruption. Chinese officials told workers to stay home, suspended public gathering and prohibited travel.

“What should I have done for an entire country closing?” Lane said. “It’s not something that’s ever happened before.”

U.S. economic impact of the coronavirus

Lane was far from the only American business owner to feel the impact of the international coronavirus outbreak. Congress passed an emergency spending bill on March 4 that allocated $1 billion in loan subsidies to allow the U.S. Small Business Administration to provide $20 million in low-interest SBA loans to affected businesses. Lawmakers are considering additional relief measures to help small businesses. Meanwhile, individual companies said they would offer benefits such as catastrophe pay and paid sick leave. See our key takeaways, below, for tips on how businesses can handle emergencies.

Acting quickly at Star Light Electronics

Following prolonged closures after Chinese New Year due to the outbreak, Lane decided to act fast to secure business financing for Star Light Electronics rather than waiting out the situation. He considered applying for a bank loan but knew the process would be slow. And despite strong business performance, he thought a bank would get hung up on his less-than-perfect personal credit profile, which slumped after a recent divorce.

“The banks can take two weeks to go through the process and they require so many hoops to jump through,” he said, deciding to turn to an alternative business lender. Non-bank lenders often have more lenient eligibility requirements and faster time to funding than banks.

Settling on SnapCap by LendingTree

Lane needed to supplement cash flow for a month or two and intended to repay debt as soon as the business could once again fill orders. SnapCap’s concierge team searched their marketplace to find Lane a one-year loan with no prepayment penalties.

“We expect to start shipping by the end of April, and we expect our cash to be reignited, if you will, by that time,” he said. “We expect to pay in full by June or July.”


Taking out the loan with OnDeck was Lane’s first experience borrowing from an online business lender. He felt unsure that OnDeck, a company with which he was unfamiliar, would follow through on promises made, such as no penalties for paying down debt early. Lane was pleased to see in his final loan agreement that OnDeck was true to their word.

“I just basically don’t want to waste my time and I don’t want to get hurt,” he said. “When it comes to getting some kind of financing…you can’t afford to waste your time.”

Business rebound

Lane has used the $200,000 loan to maintain operations and thinks the decision to borrow money will pay off. While production paused, Lane’s customers double and tripled their standing orders out of fear that a repeat situation could again restrict access to products. Once the business is back to full capacity, Lane expects Star Light Electronics to have its best year in the last decade, though he declined to share revenue figures.

“Now our factory is sitting at 50% capacity, starting to reopen, and things are starting to look great,” Lane said. “The loan was kind of perfect.”

Key takeaways

  • Borrow money when you know you can pay it back. Lane expected cash flow to pick up in one to two months’ time. But without that confidence, Lane said he wouldn’t have taken out a loan. To avoid falling into a cycle of business debt, borrow responsibly based on your ability to make payments. “If you can’t see a path to be able to repay, that’s where your first problem is,” Lane said. “You’ve got to figure that out first.”
  • Understand your repayment schedule. Many online business loans require weekly loan payments, which may surprise first-time borrowers. Take payments into account when you receive your loan and set aside money to cover weekly payments as soon as possible.
  • The SBA can help disaster-affected businesses. Although the details of SBA funding related to the effects of the coronavirus are still emerging, such loans will fall under the department’s Economic Injury Disaster Loans. These loans are different from Business Physical Disaster Loans designed for small businesses in areas where a federally declared disaster has occurred. You can read more about SBA disaster loans or reach out to your local SBA office for assistance.
  • Take out a business interruption insurance policy. Business interruption insurance protects your business assets if operations are suspended or delayed because of events listed in your policy, like theft or fire damage. Business interruption insurance is usually included in a commercial property insurance policy, which protects your building and any inventory, machinery or furniture on the premises. Business owners should take a close look at their policies to determine whether any losses arising from the coronavirus are covered.
  • Keep an emergency fund. It’s difficult to plan for unforeseen circumstances, especially something as unusual as a global health scare, but keeping an emergency fund can help keep the doors open in the face of hardship. Aim to save three to six months’ worth of operating expenses. Calculate your 12- to 15-month cash flow projections when determining how much money your business would need to survive if income resources suddenly dry up.