These are unprecedented times for business owners. While we all hope that the pandemic is short-lived and that things bounce back quickly, everyone is scrambling to figure out how to stay afloat right now. For most small business owners, that means focusing intensely on their cash position, and ensuring that they have the cash reserves (and business footprint) to ride out the crisis.
Our goal at Knowify is to help you succeed. Usually that means talking about how improved professionalism and data visibility can help you transform your business, but today we want to share a few things that are a little less Knowify-centric focused on raising money and staying afloat during the crisis.
The CARES Act Stimulus
One of the first things businesses of all varieties started doing when the COVID-19 crisis really started to pick up steam was lay off employees. They wanted to quickly scale down to a size that they felt was not only appropriate for the reduced business outlook, but could also be safely carried by the company’s cash reserves and forecast (diminished) cash flows. Seeing this, the US federal government enacted a stimulus package designed to incentivize keeping your headcount intact and wages steady: the CARES Act. Here are some things you should know.
1. The CARES Act created the Payroll Protection Program (PPP). If you are given a loan through the PPP, it can be used to pay for payroll (with some exclusions), healthcare costs, rent, utilities, and certain other items. The loans are for up to 2.5 times your monthly payroll costs, not to exceed $10,000,000. Here’s the exciting part: some portion of the loan may be converted to a grant (in other words, you won’t need to repay it!) provided that you meet certain criteria outlined in the act. For example, if you want to benefit from loan conversion to a grant, you can’t lay anyone off or reduce their salaries/wages after taking the money. You’ll have to decide if you can live with that reduced flexibility, but, if you can, it could be a great way to support your business through the current period.
2. The banks are the gatekeepers. If you’re a customer of Chase, Bank of America, etc., reach out to your service rep and ask him or her about how to apply. To ensure rapid, centralized processing, the SBA has decided to have all applications flow through the banks. Note that the Small Business Administration has tried to dramatically reduce the paperwork burden to apply for a PPP loan, but there is still some paperwork (be prepared!).
3. If you’d like to learn more, you can check out the Treasury Department’s fact sheet here
Our partnership with Lendflow/QuickCreditLine
We’re pleased to share that we’re launching a partnership with Lendflow/QuickCreditLine, a leading broker of financing services to small business. Through our Lendflow integration, you’ll be able to quickly and easily apply for funding of several different varieties, including an SBA-related loan, term loan, line of credit, or receivables factoring. Lendflow isn’t a lender itself; it has a leading network of banks and other capital providers with which it works to source you cash on attractive terms. If your local bank cannot help you now, Lendflow might be able to. We think that their service is really impressive (check out their reviews here), and we hope that it will serve you and your business well in the future!