With the SBA Running Out of Money to Fund the Paycheck Protection Program, Small Businesses Risk Losing Hope
Even as the Senate has Approved Additional Funds to Help Small Businesses, these Timing Delays to Execute the Plans Have Created Another Large Problem for Business Leaders – Stress, Frustration, and Overwhelm
The realities of what small businesses are facing right now are even more challenging than you imagined, because of the false sense of hope based on the expectations that help was on its way. While I can only speak to our own experience, I can say that other business leaders I’m talking to are experiencing similar situations.
Large companies across the globe are aggressively cutting costs to balance their decreased revenue, and people are hitting the unemployment line in droves while leaving a smaller core group to keep operations functioning. If small businesses do this too, they won’t be able to get any work done, yet they can’t easily pay for their resources.
Is It Even Possible for a Small Business to Avoid Furloughs and Layoffs?
Our story is familiar and may sound like yours. Revenue is down as clients paused projects – they intend to still complete the work we are helping them with, just “when things calm down a bit,” so we don’t have visibility on the timing of cash coming into our business. We don’t know when our traditional services will pick back up, so we are doubling our efforts on the new services we already had in development and had intended to launch prior to COVID-19 changing how businesses work. We also see how much leaders and teams are struggling, and we have knowledge and skills that can help, so we’re putting efforts here, too.
Relative to costs, we don’t want to lay off our team because we will definitely need them as we’re putting more focused effort into these new services, but we need some relief over the next few months or we will drain our business and personal coffers.
Can you say “Catch-22?”… If we want to avoid dipping into our IRAs to fund payroll, we need to furlough or layoff the team. If we want to go faster to develop and launch services that people need right now, we need to keep them on board, but know that we will have a cash flow shortfall.
If this is your story too, you’re probably thinking, “if only there was some cash relief that we could get for a few months…”
The Unfortunate Reality of Executing the CARES Act
Yes, the government relief certainly sounds promising – on paper. The plan to help small businesses keep from jettisoning employees is rooted with the right intention. Unfortunately, even if we do get the money we expect, it is taking too long to provide any certainty for business decision makers.
You might be in the same boat as us. We have not received the support that you might expect given what you are hearing about in the media. Yes, Congress passed the CARES act with the Paycheck Protection Program (PPP) to provide funds to keep people on payroll. Great idea, but no, that money is, so far, not actually available to help us out and we’re doing our best to tread water.
We are blessed to have a CFO who is on top of every detail related to our finances, and similarly abreast of every detail related to these programs the government has announced. So much so, that the instant there were links to start your PPP application, David jumped in and filled out all the required forms. But the process was not well-defined yet, the systems kept crashing, and we repeatedly received notification that we would have to reapply based on the process modifications. Even our very helpful small business contact at TD Bank said she saw things changing daily and her team was struggling to keep up with all the SBA requirements.
When all was said and done, we diligently pulled together information and submitted (and re-submitted) our application for the PPP. All this was for naught, as we received our denial letter on Friday night – the SBA had run out of funds.
The “double whammy” of bad news is that in February, prior to COVID-19 shutting the country down, we had launched a loan request to fund growth of a new service we are launching. We learned on Thursday night that this loan is also denied. We were told that we had a sound business plan, solid application, excellent credit, and more than adequate collateral. The bank is simply not accepting ANY loans during the current chaos.
What are small businesses experiencing in other countries?
This article just released by Fast Company, Why the rollout of the $2 trillion CARES Act was a colossal mess, describes why the plan didn’t really help you, the small business leader, and that other countries have their act together way better than we appear to in the US. While we can only say that our experiences, including conversations we have had with friends in other countries, suggest the article is right, the thing that really matters is how to keep you and your team sane as you go forward and stay afloat.
Managing Your Stress is as Important as Your Cash Flow
I’ve spoken to multiple business leaders over the last 2 months who are clearly experiencing a new level of stress and overwhelm. At minimum, how you do work is now done different, and you might even have more work on your plate than you did before. It doesn’t help if you are also weighing decisions to let your team hit the unemployment lines or to keep pushing forward and hope for the best.
Your sanity starts with your perspectives and how you choose to respond to this current situation. If you’re giving off a frantic, desperate vibe, then you can expect your team will respond in kind and you’ll create a destructive tempest in your company. If you believe in yourself and your team, systematically do the work that needs to be done, and calmly make decisions from a place of confidence and optimism rather than from a worried, frenzied, agitated frame of mind, then know you will get through this crisis.
In our case, we have a fundamental belief in our capabilities and that we will be fine. Thankfully, we have unique skills that people need desperately, now more than ever. It’s just a matter of getting the word out and doing whatever we can to be of service.
As you continue to navigate these difficult times, keep one eye on your here-and-now challenges and the other focused down the road on your future. Stay grounded and optimistic, and calmly do what needs to be done for you to survive today and thrive tomorrow.
Go and Find Help
It’s really important to remember that you are NOT alone! The thing is, there are LOTS of people who are struggling in this new world right now. Now is a time to be supportive. Consider what you can do to help someone out, even if it’s a little thing.
For example, my dad called up today with a small request. He shared that he had some recyclable items that he normally runs to the town dump, but discovered the dump has been closed to the public since early April and things are starting to pile up. Do we have any room in our bin (which is collected twice a week)? Of course! Easy Peasy! He dropped things off (with safe social distancing) at our house, which was a simple way we could help him that made his life easier.
If you need help, ask for it. If you can help someone else, offer it.
At Win Enterprises, we very quickly figured out that we know a lot about topics related to your virtual working requirements that many people have not yet mastered, such as working from home, running workshops virtually, staying sane in this chaos, and keeping frustration levels down.
We quickly decided to put resources together that can help you manage your current challenges. If you are working virtually, then watch this webinar we put together for you and grab the other resources about helping virtual teams thrive. We want you to succeed and enjoy life, and these resources can help you.
Best luck to you!
Pete Winiarski is the CEO of Win Enterprises, LLC. In response to the recent changes in how work is now conducted, he and his team created materials to help you and your team thrive in this virtual world. Go here now.