As unemployment claims continue to rise and residents remain confined to their homes, startup businesses are looking to encourage people to invest.

There are a number of startup costs associated with founding a business, and several new businesses are looking to stay afloat through economic uncertainty by reaching out to investors or taking advantage of government aid.

Zions Bank Senior Economist Rep. Robert Spendlove said there are a number of ways small business owners go about covering startup costs.

Some business owners participate in “bootstrapping” by providing the necessary funds through their personal finances, personal savings or taking out a second mortgage. Business owners can also get help through small investors, friends or family.

Often times, he said, businesses who are just beginning will look into formal investments by searching for early stage investors, also known as angel investors, or by searching out formal venture capital.

For investors, however, all investments come with some level of risk, especially during a pandemic.

“This is an unprecedented time for our economy,” Spendlove said. “We’ve never seen this kind of disruption in our world — the requirements to actually self-isolate and also the economic impact we’re seeing.”

When businesses reach out for help, investors assess the business to ensure the lowest level of risk and the highest possible gain.

Investors look at a number of aspects, including the business’s growth potential, financial soundness, access to reserves or the money they have already saved, and ability to weather difficult times.

“One of the toughest things for small businesses is being able to grow at the right rate. You don’t want to be shrinking or stagnating,” Spendlove said.

Val Hale, executive director of the Utah Governor’s Office of Economic Development, oversees business services and related programs meant to help businesses.

Hale said recent events have economically hurt businesses of all sizes, but especially businesses that haven’t established a history or had the opportunity to create rainy day funds. Utah has a fair number of small businesses backed by venture capitalists, he said.

“We have tens of thousands of small businesses,” Hale said. “Most of our jobs in the state are small businesses. It’s a critical time for them, and we hope they can take advantage of the variety of programs that are out there right now to try to get through this time so they can continue operating once we get out of this.”

Despite the less-than-satisfactory outlook, Hale said there are still some successes happening even now. Just yesterday, the California tech company SoFi acquired a Salt Lake payment platform called Galileo for $1.2 billion.

Another business, Podium, founded in Utah Valley, also secured $125 million in funding during its last round. The new capital values the young tech startup at around $1.5 billion and brings the company’s known capital to almost $218 million.

“There are some success stories out there, and there are venture capitalists still willing to invest, but I suspect everybody is a lot more cautious now,” Hale said. “It’s probably a lot harder for small businesses to go out and convince people to invest money in their enterprise.”

Startup businesses are designed to grow quickly, but that growth comes with more risk. Over 50 startups centered around Silicon Valley in California laid off or furloughed about 6,000 employees in a matter of weeks, according to the New York Times.

This is because venture capitalists are also in somewhat of a precarious situation, Hale said. With this level of uncertainty, approaching investors with new or underdeveloped ideas is risky, but investors are still looking for long-term and diverse ventures.

“I’m sure venture capitalists out there are always looking for a good business or business model, but right now it’s just going to be harder to pry money out of their hands,” Hale said.

For fairly new startup businesses, investors will be looking at the leadership to see if the owners or other administration have been a part of any other successful startups. Obviously, Hale said, the idea also will weigh quite heavily on the investors’ decisions.

In order to secure funding, some businesses are pivoting to include the pandemic, adding no-contact aspects to daily operations or even expanding their initial business plan to include social distancing. Other startups in specific industries — such as telemedicine, food delivery, online learning, telecommuting and gaming — continue to grow despite economic hardships.

The most secure way for startup businesses to stay afloat is by accessing funding through the Small Business Administration by speaking with local banks and credit unions, Spendlove said.

Federal legislators passed the Coronavirus Aid, Relief, and Economic Security Act to provide economic relief nation wide. The CARES Act offers stimulus packages to individuals and small businesses, with almost $350 billion set aside in loans and grants.

The largest program established by the legislation, the paycheck protection program, allows businesses with less than 500 employees to apply for 2.5 times the average amount required to maintain monthly payroll. These funds can then be used to pay employees, rent or utilities.

“The program has been so popular that they fear that the entire $350 billion will be used up in a matter of days,” Spendlove said. “Right now, Congress is talking about extending the funding by up to an additional $250 billion as soon as this Thursday.”

Spendlove recommends the first thing startup businesses should do is reach out to their financial institutions to take advantage of the federal aid, he said.

Spendlove said the requirements banks would ordinarily have placed on small business loans have largely been waived.

Usually, businesses have to provide financial statements and other sources of collateral, but for the patch protection program, the only requirement is that they be able to show one year of payroll.

If businesses are less than a year old, banks will take the last couple of months of payroll to make the average that is required to establish the maximum amount of aid a business can receive, Spendlove said. Seasonal businesses can take the average from their peak seasons over the past year and use that to document payroll costs.