Small Business Educational Resources

IMPORTANT – EIDL & PPP Updates

• EIDL Update
• PPP – New EZ Full Forgiveness Applications

There are a wide array of opinions predicting what may or may not happen in the future. While we can’t predict the future, the quip that “The market can remain irrational longer than you can remain solvent” is something we should keep in mind. It is quite possible that the impact of the COVID-19 virus could go on for months. Regardless if we believe that or not, it would be prudent for any businessperson to prepare for any possible lengthy impact this may have on your business.

Here are some ways that your business can survive this storm.

Webinar Events

Structuring Your Finances to Align to the PPP Loan Forgiveness Application

• Wednesday, May 27 at 9:00am
• Link to join the webinar (no pre-registration; just join): Click Here to Join the Webinar
• Meeting number (access code): 924 342 054
• Meeting password: t3vHW3pwQq3 

SBA Memos

• Joint Statement by SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin
• XML File Submission Process for Paycheck Protection Program (PPP)
• EIDL – Ag Businesses Talking Points
• Joint Statement by Administrator Jovita Carranza and Secretary Steven T. Mnuchin on PPP success

Reduce Your Burn Rate

Burn rate is how much cash you spend in a given period just to stay in business. Because many businesses will see a drop in revenue, reducing your burn rate as much as possible and save cash will increase the length of time you can stay in business before things improve. This is done by looking at expenses and eliminating, reducing, or restructuring as many as possible. Here are many ideas on what you can do:

• Renegotiate Rent Payments – Rent can be a large cost for many businesses. Begin talking to your landlord today about a temporary reduced or free rent period for the duration that your business is affected.
• Talk to Your Lender About Debt Repayment – If you are worried that your ability to repay a business loan or debt will be affected, call your lender today and begin discussing options. If the economic conditions worsen, they will be increasingly willing to negotiate. This could involve deferred payments or reduced payments for a period.
• Discuss terms with suppliers – Perhaps you need a specific material or supply just to operate your business. Talk with your supplier to see if you can secure price reductions, extended credit terms, return unused product, or some other method to reduce the cash you have to spend right now simply to operate your business.
• Reduce work hours and/or add furlough days – Times like these can be stressful for everyone, especially the insecurity that employees may feel about their jobs. Involve them in decisions to reduce the hours worked and voluntary furlough days (unpaid days off) to find a solution that can ensure the survivability of the business.
• Cut unnecessary costs – Do you charge your lunches to the company? Might be a good time to start bringing a sandwich from home. Do you have an annual golf club membership paid for by the company? You possibly might have more time to golf if your company goes out of business but not enough money for green fees. Start cutting the fat and setting priorities. Every bit can make a difference.

Innovate & Seek New Ways to Make Money

A silver lining can be found in almost any crisis. How can your business capitalize on this opportunity? This may require all of your creative thinking on how to make it through these tough times. Fortune favors the bold. Here are some ideas:

• Use what you have in a different way – Think outside the box when it comes to the products, services and resources at your disposal. Look for new and creative ways to use those resources given the current shifts in consumer trends.
• Communicate with your customers – Your customers are real people like you. Communicate with them and let them know what your plans are to continue to provide them with your products and/or services.
• Get real about sales – Maybe there is still business, but it’s much lower. Now is the time to get out there and SELL your product or service as opposed to waiting for it to come to you.
• Use video and teleconferencing technology – Many things can be moved online. Do you run exercise classes? Move it online. Did your event get cancelled? Hold a new event online. Harness the full power of technology.
• Create a new product – Have an idea for something new? R&D takes time, maybe now is the time to do it and be ready to launch something spectacular when this entire phase is over.
• Work on that project you’ve been putting off – Does a machine need to be overhauled? Is your inventory a mess? Have you been wanting to plan out a new market segment of your business? If you have the cash to stay afloat, maybe now is the time to take a serious look into these. Use the people and the resources you have to get stuff done.

Secure Financing

Tried all these but haven’t staunched the bleeding? It might be time to look at “bridge financing”, basically money that can keep you alive till you start making money again. Keep in mind that loans need to be repaid, so ask yourself if you can realistically reduce your costs enough so that you don’t need financing. On the other hand, if you find that you are financially secure, it may be a good time to secure financing to fund that project. If you do, here are some places to look:

• Consolidate existing high-interest debt – This can be a good time to utilize the funding available to pay off high-interest credit card debt or other loans.
• SBA Disaster Loan Assistance – The State of Utah is working with the Small Business Administration (SBA) to secure low interest loans for small businesses impacted by the COVID-19 outbreak. Small business are encouraged to apply for funding through this website.
• Salt Lake City Emergency Loan Fund – SLC is launching a loan fund to assist SLC based companies that are experiencing financial hardships as a result of COVID-19. The details are under development but you can learn more by visiting this website.
• Contact Your Rural Municipality – If you are living in a rural area, sometimes smaller municipalities can step in and provide micro lending with fewer regulations and more mobility than large municipalities. In southeastern Utah, the Association of Local Governments is intending to use their Revolving Loan Funds in an emergency capacity.
• Bank or Credit Union Loan – Contact your local bank or credit union to see what financing you may qualify for.
• Private Loan – It may be time to lean on family or friends for a loan to keep things afloat. If you do pursue this route, at the very least, be sure to have loan terms written down including loan amount, how interest is calculated, a payment schedule, and what happens if you are not able to repay the loan.
• Equity Investor – It might be time to bring in an investor. To do this usually requires more than just a survival plan. It requires a strategic plan on how this money will help the business grow and thrive.

Department of Workforce Services (DWS)

Your Local Government

Right now, there are many unanswered questions on the potential impact on our business and how the government can help. The state of Utah and Salt Lake City are both trying to collect information and here is how you can help:

• For Utah Business Impacted by COVID-19 – The SBA and Utah Division of Emergency Management (DEM) needs information from you to qualify our state for assistance from the federal government. They are asking affected business to complete an Economic Injury Worksheet and email it to the following email address: jannawilkinson@utah.gov
• Salt Lake City Businesses – The SLC Economic Development Team has created a survey to better understand the challenges facing SLC bases in order to better respond and provide additional services. You can find he survey here.
• Governor’s Office of Economic Development (GOED) – GOED has provided additional information, regarding assistance for small businesses, at this time. Visit https://coronavirus.utah.gov/business/ for more details.
• US Small Business Administration (SBA) – The SBA is prepared to provide low interest disaster loans to businesses of all sizes. Additional information for disaster loan assistance can be found at https://disasterloan.sba.gov/ela/Information/index

The Utah SBDC Network is here to help businesses who have been affected by the current health crisis. Our consultants and partners including the SBA provide services to assist with disaster loan applications, long term planning, insurance navigation, physical and economic loss estimations, business preparedness and more.