Mon Mar 15, 2021 | | Business, CFO Services, PPP

Take Advantage Of COVID Relief Options For Your Business

covid relief options

The COVID-19 pandemic forced many organizations to close quickly and lose revenue for an extended period of time, putting their ability to stay in business at risk. Many businesses did not have enough cash reserves to sustain the shutdown and unfortunately went out of business. Currently, we are helping businesses during these challenging times with two government lending programs, the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) as COVID relief options. 

We recently conducted a webinar as part of the Middlesex County Regional Chamber of Commerce’s Open for Business series on how to take advantage of the latest COVID relief options and talked with our founder, Alan Lefkowitz after the program to recap the highlights of what we discussed.

covid relief options for your business

Why is the Paycheck Protection Program (PPP) Important for Small Businesses? 

The PPP gives cash to companies that are struggling through the COVID crisis. It’s meant to keep employees employed and off unemployment. We’re seeing our clients benefiting from PPP by staying in business and doing well enough to pay their bills. 

What are some strategies businesses can utilize when applying for the loan or forgiveness for the loan?

Businesses should evaluate their company by looking forward and anticipating the work and payroll costs they have. We can help with that. Many businesses have had to lay people off, and you don’t want to do that too early because if headcount drops, your loan forgiveness amount may be reduced proportionally. There are also rules to follow about how much you can reduce an employee’s salary without impinging on the amount of forgiveness you get. 

What are some strategies that businesses can use when working with a bank to get the second round of PPP?

We recommend that anyone that hasn’t filed for forgiveness for the first round should wait until after they apply for the second round since the Small Business Administration (SBA) could run out of funding. I recommend looking at each bank’s website since the documentation requirements are different for each one. It’s important to be organized and know what they need. We have experience working with many banks and can help you prepare for this since we know it’s complicated.

If a business didn’t apply for the first round of PPP, could they still apply for the second?

Yes, apply now, but follow the rules since the new legislation came out. You can’t apply for the second round after March 31st. And with that, the funds might run out earlier, so there’s no guarantee that you’ll get the money. 

What are some other options and strategies besides PPP for businesses to consider? 

I would also recommend looking into the EIDL (Economic Injury Disaster Loan), state programs and aid, small business loans and the ERTC (Employee Retention Credit). You have to move quickly because the demand is high; it’s really a hit or miss. I also recommend that businesses focus on cash management and cash flow forecasting on a quarterly basis to help anticipate and prepare for the future.

How can CFO Strategies help businesses determine the best course of action in terms of which program to pursue?

We can help map out your needs starting with a forecast. If you meet the criteria for one of these programs, go for it, it’s worth it. These programs help free up other cash in your business once you use the loan. You’re not going to find another place to get a 5-year, 1-percent loan. 

CFO Strategies is helping clients navigate these uncharted waters in determining the right program. We work with small and mid-size businesses to deliver strategic and high-quality CFO, controller, accounting, and bookkeeping services. For more information about recommended steps and a diagnostic of which loan is best for your company’s needs, or to take advantage of any of our other services, please contact us.