Strategic Relationships & Preparing for the CARES Act

The GrowthLab Weekly Jump is an information session hosted every Monday that tackles relevant issues in today’s trying times! Jumpstart your week with practical advice in times of uncertainty.



In case you missed this week’s Jump session, you can find the recording & slide deck below:

• Powerpoint
• Video 



This week is the make-it-or-break-it week for our economy and small businesses as April 1 is right around the corner, and most bills and mortgages are due. This Week’s Focus is Strategic relationships, and Nuts & Bolts of preparing for the CARES Act.



This Weeks Actions:

1. Mortgage & Rent – Forbearances & Deferments.
2. Reconnect with your Banker – Get ready for the new SBA programs.
3. Organize & Prepare – Get your paperwork in order.
4. People Planning – This may look different than last week’s plan.
5. Communication – Be open and transparent.



Action 1: Mortgage & Rent 

We have a few helpful tips with your mortgages and rent bills. If you own property & have a mortgage, you should call your mortgage servicer or bank and ask for your options. There are options such as defer principal repayment or 3-month forbearance. These apply to residential, not just commercial. If you rent, be transparent with your landlord or property manager. Offer options like reduction in rent for 3 months or defer rent for 3 months. 



Action 2: Reconnect with your banker

There is a lot of information about the CARES Act and the respective programs. As of today, there is no mechanism yet to apply for the majority. One thing we do know is that banks will administer the immediate opportunity, – the Payroll Protection Program (PPP) – and others.



Call your banker & reconnect. Start the conversation around the CARES Act, specifically the payroll protection program. Ensure that your bank is an SBA approved lender. If not, find one.



Next you should express interest. Tell them you are interested in participating in the Payroll Protection Program, if you qualify. Your number 1 goal is to be at the top of the list when the program turns on.



Action 3: Organize and Prepare 

Although the SBA has yet to release the specific mechanics, get your house in order. Gather the paperwork, financials, and plan, so when the application opens, you’re ready to submit. Gather the following documents as a starting point;

Payroll Reports

• 940/ 941s from 2019
• YTD monthly payroll reports through February 
• 2019 monthly payroll reports

Financials

• 2019 monthly P&L & Balance Sheet
• 2020 YTD monthly P&L & Balance Sheet

Personal Financial Statement (PFS)

• Each bank may have their own form and will determine the necessity 

Although this may be the quickest loan underwriting any of us have experienced, let’s just be prepared.



Action 4: People Planning 

Walking into last week, small businesses were talking about layoffs and furloughs. Walking out of last week, there is now money on the table with forgivable SBA loans if you keep your people working. The intent of the CARES Act is to put people back to work. As managers, we need to balance, in good faith, putting people back to work while potentially cleaning up your balance sheet.

Step 1: Put People Back to Work.

• Identify the high potentials and skilled workers.

Step 2: Clean up your balance sheet.

Step 3: Focus excess people capacity on shoring up foundation.

• This applies to manufacturers, service businesses, restaurants, distributors, etc.



Action 5: Communication 

Now, more than ever, be open and transparent around your intent and thought process with your: people, customers,vendors, and financing sources. 



Having internal communication is going to be a big part in leading your business to success. Have open conversations around furloughs & layoffs with the team. You’d be surprised, some people are having a difficult time working from home while managing their children’s virtual schooling. Don’t downplay the importance of communicating the sales pipeline and cost cutting strategies. 



Possessing good external communication is going to create confidence with customers and vendors that your business will survive. Talk about what you are doing to shore up your finances. Now, more than ever, your banking and financing relationships are imperative to survival. 

Collaborative communication is a key to success!