What about me?

Well, here we are, heading into week four of the National quarantine. How are you making out? I’m praying all is well and you are managing well.

Through all of this I am constantly looking for the good news and excitement. In talking with my clients this week, some have won new contracts, others are working on proposals, and some have received funding to continue working. One of my clients received two significant certifications - 8(a) and HUBZone. We’ve been anxiously awaiting these certifications because they are opening doors to other opportunities she’s been working hard at capturing. Even I received some good news!

I celebrate all small and large wins! With the exception of my book, this is the first payment I’ve ever received for my writing. As a writer for Medium, the online publication, it’s exciting to receive my first payment because I know others are coming. I will be framing this just like I did when I received my very first payment when I started my business in 1997.

The good news did not stop there.

This past week, the Federal Government released the Paycheck Protection Program (PPP) for small businesses which is designed to provide up to two and a half months of payroll funds to keep businesses operational and their workforce intact. Applications for the program opened up on Friday. Bank of America alone reported 85,000 small businesses applied through their portal on Friday.

While this program is designed to provide relief for small businesses and their employees, there’s still a lot of ambiguity, holes and misunderstandings around the execution of the program. I spent this weekend attempting to get answers for many of my clients.

There remains a good block of small businesses who will find this program to be out of reach for them. Here’s how.

1. They don’t have an adequate banking relationship.
2. Their existing bank is not participating in the program.
3. They have a pre-existing credit challenge.

Here’s what I learned:

The demand for the loans far outweighs the banking bandwidth. Banks and financial institutions do not have the resources to manage the requests and the needs that currently exist. While SBA is backing the loans, banks are managing the logistics. A banker friend said “It is BEYOND CRAZY…Yesterday was the craziest day I have ever had in my 30+ years in banking!”

Banks are having to establish standards in order to manage the demand. Which means, they are only accepting PPP loan requests from existing clients and possibly denying applications from those with credit challenges.

In addition, SBA is expected to provide more guidance regarding the program in the coming week(s) which means more changes to manage. For that reason, large banking institutions, like Wells Fargo and some others, paused the acceptance of applications all together. They are concerned with getting stuck with loans that SBA does not forgive. Banks are left with having to make sound business decisions in order to protect their bottom lines.

If you are a small business stuck in the middle, what do you do?

• Contact your bank immediately. If you can’t get someone on the phone, go to a branch location. Ask them how they can support you.
• If your bank is not participating or no longer accepting applications, ask them for a referral partner that will accept applications from their banking customers.
• Submit an application through Kabbage. They will shop your request with participating banks and lenders. Carefully consider the options presented and make certain you use the funds received in accordance with the program to ensure your loan is later forgiven. READ THE FINE PRINT!
• Connect with a small local or regional bank. They may have more flexibility with accepting new clients and applications than the larger banks.
• Contact your local SBA office and express your concerns. They may also provide recommended resources.

In addition, as you continue to navigate this cashflow maze, it’s important to protect what you have coming in. Bill frequently. Bill on time. Bill accurately. Stay on top of what’s outstanding with your customers. Beyond working capital, collection is key.