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Plans for Reopening in the Wake of the Pandemic

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By James Pruitt, Senior Staff Writer

 

Just when we thought we were “over the hump,” coronavirus cases spiked. Many brick-and-mortar stores took fatal blows trailing the last wave of shutdowns. Hopefully, the lessons from the first wave may cushion the impact of the next.

The necessary steps include education about the necessary measures to protect customers and staff, and to balance this information with the needs of your business. Then business owners can plan the necessary steps for reopening in a safe manner.

Always ensure that information sources are reliable. Some of the best sources for information include the CDC:

Misinformation abounds about coronavirus, and the importance of accurate information about this crisis cannot be overstated.

We can expect another spike in coronavirus cases over the winter. Brick-and-mortar businesses will face a larger impact than online businesses. Brick-and-mortar stores should consider the following:

  • the ability to enforce proper social distancing
  • any lockdown orders that may exist within that locality
  • the severity of the pandemic within your locality
  • the level of contact with customers.

Examples of businesses facing the worst impact include gyms, restaurants, and beauty establishments.

Depending on the structure of the business, human resources issues may prove tricky. For example, last spring, a business had to shut down for two weeks because an employee called in to lie about having coronavirus: https://www.thestate.com/news/coronavirus/article241351951.html.

The company’s facility needed a thorough cleaning, that led to huge financial losses in the meantime. Other, more small-scale companies may have the flexibility to deal with such issues on a case-by-case basis, given the management’s closer relationship with the employee. The ABA (American Bar Association) notes the importance of input from both employees and clients. They also note that each reopening plan will be different, given the circumstances of the company. For example, some businesses may require brief health screenings by qualified health professionals, such as quick temperature checks.

The ABA notes that “[r]eopening a business during the pandemic is essential and inevitable but it will certainly be a daunting process that will require consideration of how workers can be brought on safely, how customer concerns will be addressed, and how everything can be done in a way that allows the company to survive financially.”

https://www.americanbar.org/groups/business_law/publications/blt/2020/10/protecting-workers/.

On the plus side, news is positive about defeating the pandemic in the next several months. Recently, several companies and institutions have developed several vaccines with amazing success rates. On the negative side, winter promises to bring a spike in cases before return to a semblance of normal. Dr. Anthony Fauci estimates a rollback of coronavirus measures sometime in April:

https://www.deseret.com/u-s-world/2020/11/13/21562555/coronavirus-dr-anthony-fauci-covid-19-vaccine.

In the meantime, small businesses can use this next spike as an opportunity to expand their horizons, build their online presence, and augment their human resources expertise. This pandemic will not last forever, and resources abound for struggling business owners, despite its devastating impact. Such a crisis arises once in a blue moon. Hopefully we will be able to strike a balance.

Paying It Forward with Acts of Kindness

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By Debbie Gregory.

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Acts of kindness are therapeutic and will make you feel good and empower you.   Your acts of kindness will also inspire others to be kind.   We are learning that what we do impacts others and we are all in this together.  Kindness has an amazing domino effect that is so positive and will impact our small business.   VAMBOA, the Veterans and Military Business Owners Association h is providing a list of kind acts for small businesses to consider.

Some wonderful Acts of Kindness:

  • Donating to Food Banks- donate some of the extra non-perishable foods in your pantry. If you are able make a monetary donation to fund meals.
  • Donating meals to essential workers.
  • Donating meals to students especially with schools being closed, it has been impacting many needy families that receive meals at schools for their children.
  • Deliver meals – organizations that are preparing meals need help to deliver them to needy families.
  • Donating Face Masks to hospitals and organizations
  • Write notes and cards to elderly and shut ins to brighten their days.
  • Donating Care, Food and Goodie Packages: Put together these packages for those in need in your community, elderly shut-ins, first responders, essential workers and military and veterans.
  • Buy a bushel of apples, cases of water or drinks, boxes of packaged snacks, candies, gum, etc. and take them to your local fire or police station.
  • Books and magazines are meant to be passed on and shared. Go through read magazines and books and donate them to homes for elderly with shut-ins to help them pass the time.
  • Make handmade items that come from the heart. These can be knitted handmade items, greeting cards, paracord bracelets and special notes.
  • Purchasing needed items such as sanitizer and cleaning items. These might be nice to send to your remote workers and those in need.
  • Gift cards for those who are having hard times to markets and stores.
  • Providing Free Advice to Impacted Businesses: Many small businesses are affected and hurting from the pandemic.  They need help and often do not know where to find it.  Volunteer to provide advice in areas of your expertise.   You may find that those with expertise you need will help you.   You might join forces with others and form a task force of sorts to offer free advice and consulting.
  • Hosting Virtual Classes: Perhaps the expertise you possess is needed and can can best be presented and utilized in a virtual class.
  • Create COVID Survival Guides for Small Businesses and to share and play forward what you have learned so others can benefit with Real time, actionable. advice and present it in zoom sessions.
  • Teaching and/or tutoring others. With so many children and young people having to learn virtually, someone to help is a blessing.  Many parents are doing triple duty, parenting, teaching, and working so this can be a huge relief.
  • Small Businesses “lending” staff to other small businesses providing a win/win for all.
  • Patronizing local restaurants – ordering meals to go to help them stay in business.
  • Tipping generously at restaurants or to the barista who prepares your latte to go.
  • When you go to market or store, ask neighbors what you can get for them, especially your elderly neighbors and friends.
  • Organize zooms or Facetime to spend time with those friends, family and neighbors who feel isolated and are able to simply click on a link.

These are such challenging times for all of us including small business owners.  Helping others can come back to you and is a wonderful way to feel like you are making a difference and to be positive.  We all need to work together for everyone.

Survey on The Impacts of Post-COVID Funding

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By Debbie Gregory.

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To overcome the economic impact of the COVID-19 pandemic, many small businesses are being forced to seek external funding through alternative funding sources, government grants, and loans from traditional banking institutions.

You may whether small businesses normally applied for loans or is this a new behavior in response to the pandemic?

Earlier this year, Small Biz Ahead surveyed small business owners across the country to learn exactly how the pandemic was affecting their use of both traditional and alternative funding. Here is what the survey found:

Starting a New Business:

Prior to the pandemic, most small business owners were hesitant to use external funding sources.

  • Less than 1% used a federal or state grant to start their business.
  • 60% of all small business owners used their own personal savings to start or run their businesses.

Running an Established Business:

  • 85% of small businesses sought zero external funding in the last three years.
  • 28% of small business owners use their personal credit cards to pay for business expenses.
  • If the business did need money, they were more likely to seek out traditional funding sources as 41% stated they would go to their main bank first.
  • 25% stated that they would simply use credit cards or existing funds.

Does age affect the business owner’s thoughts on external financing?

They found that younger generations tend to be more open to applying for financing or loans though they are still a bit hesitant. However, they do typically turn to friends and family for loans first. The study found that about a third of small business owners between the ages of 18-34 currently use friends and family as their main source to finance their business. This drops dramatically for generations older than 34, just over 10% of 35-44 year olds and less than 2% of 45-54 year olds stated that they seek out loans from friends or family.

What do small business owners look for when selecting a financial provider?

The small business owners surveyed:

  • 38% stated that interest rates are the most important factor in choosing where to obtain funding.
  • 38% stated that the terms and conditions were the most important factor.
  • 34% prefer a financial provider who they know and have a relationship.

Does gender affect where the business owner will look for financing?

The study found that men (38%) are much more likely to view an existing relationships as the most important factor when selecting a financial provider, whereas women (41%) typically go out of their way to look for less expensive funding and lower interest rates.

How Does Age Impact Funding Choices?

There was also a clear divide between the age groups:

  • The 18-34 age group favored institutions that offered easy applications,
  • The 35-64 age group favored institutions with less expensive loans and more competitive rates
  • The 65 and over age group favored institutions that they had a prior financial relationship.

What about alternative funding (such as crowdfunding or peer-to-peer)?

According to the study, alternative financing is not used very often by small business owners in the USA:

  • 2% of small businesses have used equity financing.
  • 4% have used P2P (peer-to-peer) lending.

However, this is changing. Many small business owners (42%) stated that they were open to the possibility of using alternative financing in the future should the need arise. The 18-34 age group were the most comfortable with alternative financing options:

  • More than 10% stated that they have used P2P lending.
  • A bit over 5% stated that they have used crowdfunding.
  • All in this group stated that they would consider using alternatives to traditional finance in the future.

VAMBOA, the Veterans and Military Small Business Owners Association wants to learn your opinions on financing and small business funding.  Have you needed to turn to external financing to survive the pandemic?   Please let us know by emailing us:

info@vamboa.org

If you are not yet a member of VAMBOA, we invite you to join.  There are not any fees or dues and you may use our seal on your collateral and website.   Below is a link to register to become a VAMBOA member:

https://vamboa.org/member-registration

 

By Debbie Gregory.

LinkedIN Debbie Gregory VAMBOA VAMBOA Facebook VAMBOA Twitter

 

 

The federal Small Business Agency known as the SBA has a few new ways to help small businesses stay in business while we all navigate the COVID crisis. Thanks to H.R. 748 the SBA has been able to expand their loan programs with new offerings for small businesses as well as some specific options for large corporations.

 

What Other Assistance does H.R. 748 Provide?

 

The program also provides $17 billion dollars to small businesses that have existing SBA loans. These funds can be used to pay six months of principal and interest payments on existing SBA loans.

 

1.) Additionally, the program provides $10 billion dollars for disaster loans and emergency grants. Each of these types of loans are limited to $10,000 per small business. These types of loans are quite like the Paycheck Protection Program or PPP described in part one of this mini article series.  They can be used for other operational expenses beyond payroll, mortgage or rent, and utilities.   In theory, any small business that applies for an economic injury disaster loan receives an advance, within 3 days, of $10,000 regardless of whether they eventually are approved for the loan. This $10,000 advance does not need to be repaid either. The loan itself can be for up to $2 million dollars at a low interest rate (currently it is 3.75% for small businesses and 2.75% for nonprofit organizations). Repayment terms vary. You can apply for this loan directly from the SBA here> https://covid19relief.sba.gov/.

 

2.) The program also provides $265 Million dollars for SBA business development services. The SBA offers Small Business Development Centers (SBDCs) that provide no-cost services for small businesses and entrepreneurs that will assist in critical business areas such as:

  • Consulting
  • Mentoring
  • Training services
  • Business development services
  • and much more

 

What Other Financial Assistance Programs Have Been Added for Businesses that Do Not Qualify for Other SBA Programs?  

 

The COVID-19 pandemic is having severe economic consequences all over the United States. Many larger businesses are ineligible for SBA programs. However, the goal of H.R. 748 is to assist large employers as well. Some of the additions that can help larger companies include:

 

1.) H.R. 748 states that the Federal Reserve can now make loans, as well as loan guarantees, to businesses not covered by other programs.  They can also now make loans to state and local governments. Unlike the SBA programs for small businesses, the Fed cannot forgive these loans and borrowers must repay them.

 

2.) H.R. 748 also provides the federal -19 pandemic. The funds are as follows:

 

  • $25 billion for loans to passenger air carriers
  • $4 billion for loans to cargo air carriers
  • $17 billion for loans to businesses critical to maintaining national security
  • $32 billion for additional financial assistance to air carriers and related employers (such as caterers and airport contractors)

 

Small Business or Large Corporation – if you need help to keep your business afloat while the COVID-19 pandemic continues to rage across the United States, then check out what is available to you from the SBA and H.R. 748.   We advise that patience is in order.

 

If you are not yet a member of VAMBOA, the Veterans and Military Business Owners Association, we invite you to join.  Please be advised that there are not any dues or fees and you can use our seal on your collateral and website.   You may register for membership here:   https://vamboa.org/member-registration/ ‘’

 

Everyone stay safe and healthy!

 

By Debbie Gregory.

LinkedIN Debbie Gregory VAMBOA VAMBOA Facebook VAMBOA Twitter

 

Did you know that the Small Business Administration (SBA) helps small businesses obtain the loans they need? The federal SBA provides a wealth of financial assistance, and other services to small businesses across the United States. Recently they have added quite a few new programs to help thanks to H.R. 748.

 

How does the SBA determine whether or not your business is considered a small business? The SBA determines whether you are a small business using either your revenue numbers or your employee headcount (the headcount varies by industry).

 

The main SBA program most business apply and qualify for is a loan guarantee program. The SBA may repay a portion of the amount borrowed by qualified businesses in cases when the small business borrower cannot repay the loan. Loan guarantees reduce the overall risk to the lender, thus enabling the small business to obtain more favorable terms, such as a lower interest rate or longer term.

 

The SBA also directly makes low-interest loans to businesses and nonprofit organizations following declared disasters. A disaster loan may be for either covering repairs and replacement of physical assets damaged in a disaster or covering small business operating expenses after a disaster.

 

What is new?   H.R. 748 is!

In general terms, H.R. 748 provides $349 billion dollars for forgivable small business loans. This program is called the Paycheck Protection Program (PPP) and was designed to subsidize small businesses so that they can continue to pay their employees and overhead costs while their revenues have been reduced due to the COVID-19 pandemic.

 

Unlike a typical SBA loan, businesses will not be required to repay these loans if the money is used exclusively to pay:

  • Employee wages
  • Employee benefits
  • Mortgage or rent for the business’s location
  • Utility bills for the business’s location

 

Instead, the loans will be forgiven after eight weeks. The business is required to clearly document how the money was used to ensure adherence to the loan program’s rules. If the business has not properly documented spending the loan money, or spent the money on other things, they will be required to pay all of it back in full at an interest rate of four percent (4%).

 

Is $349 Billion Enough to go Around? 

The program has enough to provide every eligible employer a forgivable loan for up to 2.5 months of payroll.   With this said many are receiving so much more including businesses that you might not characterize as small businesses.   For example, large public companies and major sports teams have received PPP funds and the the money has been depleted once already and refunded.

 

Who is Eligible for Assistance? 

All businesses and nonprofit organizations with fewer than 500 employees are eligible. There are also a few businesses that will qualify even though they have more than 500 employees. For example, a business may have more than 500 employees per location. Some sole-proprietors and self-employed people are also eligible for relief. Loans are available on a first-come, first-served basis.

 

How Much Money can you Get? 

You can qualify for about 2.5 times your average monthly payroll, or up to $10 million dollars. You do not even need to prove that you could potentially pay back the loan; instead, you simply need to prove that you have been running your business prior to February 15, 2020. This sometimes translates into the money going to businesses that don’t need it and there has been some widespread fraud.

 

Stay tuned for part 2 of this mini article series.   Part 2 will provide information on other assistance programs that H.R. 748 provides. There are even a few programs designed for specific types of large corporations.

 

VAMBOA, the Veterans and Military Business Owners Association believes that small veteran and military business owners should benefit first.   They made huge sacrifices for our nation.  We are disheartened to see huge corporations receiving this money and the program running out.

 

If you are not already a member of VAMBOA, the Veterans and Military Business Owners Association, please consider joining.  We do not charge dues or fees and members can use our seal on your collateral and web site.   Here is a link to register to join:  https://vamboa.org/member-registration/

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