Small Business Development Centers (SBDC) and You: What is available to me?

29. May 2020 16:18

By: Laurie Wolff, Certified Global Business Professional

If you missed funding in the initial rounds of the CARES Act stimulus, it is not too late to connect with your local Small Business Development Centers (SBDC) for help.  Some states, for example New Jersey,  have released new grant programs for small business as they have received their own federal funds.  A variety of nonprofits are raising funds to assist business, sometimes limited to particular regions or to particular types of business owners, such as women and minorities.  These programs are usually small grants, but those that receive them often get other help such as business counseling. 

As the need continues, I’m confident new funding will get raised and distributed.  Even if nothing is available for your business at this moment, the staff of the local SBDC is likely to learn of anything new as it comes along.  In New Jersey, businesses that applied but did not receive funds because the money ran out are getting priority in the second round.   

SBDCs can also provide counsel on best practices for managing cash flow, identifying new customers and potential markets, pivoting your business and other assistance to weather the crisis even if direct grants are not available.  They are a gateway to connecting your business with a network of service providers and resources to help you grow.

To find help near you, visit https://www.sba.gov/local-assistance/find/

Too see more from Laurie, be sure to check out her sessions Trade Finance: Getting the Funding You Need and Managing Risk for Exporters and Identifying New Export Markets and Customers at the IWF 2020 Education Conference.

Reach Laurie Wolff c/o IWFNetworkNews@iwfatlanta.com   

SBA Paycheck Protection Loans Went Fast, But More Is On the Way

21. April 2020 09:43

By: Laurie Wolff, Certified Global Business Professional

Wow, that went fast. Some of you were able to obtain loans through the SBA’s Payroll Protection Program or Economic Injury Disaster Loans, but many were not. Even though the funding levels were larger than anything the SBA has done before, the needs are significantly greater than the funding provided. The SBA has stopped accepting applications unless or until the government authorizes additional funding.

My best guess is that more will be authorized this week. We have already had more people file for unemployment claims than we have created jobs since the end of the Great Recession. Independent contractors and self-employed workers have not yet been able to file for benefits even though those were authorized under the federal stimulus programs. States literally have not had the capacity to process these claims, and as far as I can tell the first of these will start hitting the system next week so expect continued historically high numbers for jobless claims for at least the rest of this month as states play catch up.

Politicians will respond to this with more stimulus, so if you have applications that were pending and not approved, keep working with your bankers because if (when) more funding is authorized, it too will be dispersed quickly. Most state and loan programs were also quickly exhausted but keep in contact with local small business assistance centers and economic development offices in case additional resources become available.

I’ll blog about what the Federal Reserve is doing to stabilize lending and the financial system soon. Some of what they are doing directly benefits large businesses, but if the Fed is able to take the loans guaranteed through the SBA program off the books of banks, that gives banks more ability to lend. Stay in close contact with your lenders. Your bank has a vested interest in your ability to survive this crisis.

I have friends that got the loans and some that didn’t. They applied equally quickly and as far as I can tell were equally worthy. It doesn’t feel fair. I’m glad for those that did get the loans and for their workers. All I can do is encourage those that didn’t to keep at it.

I plan to talk with you about exporting when we meet in Atlanta at IWF, but in the meanwhile I’m happy to answer questions and make referrals to resources, whatever will help you move forward with your business.

Reach Laurie Wolff c/o IWFNetworkNews@iwfatlanta.com   

Getting Business Finance and Help at Your Local Level

6. April 2020 10:38

By: Laurie Wolff, Certified Global Business Professional

So far in my blogs we’ve focused on small business resources available at the national level through the CARES stimulus package. Where else can you get help? Almost certainly your state has programs available to assist small business. Many states are offering zero interest or low interest loans to businesses that qualify. There are funding pools available in some metropolitan areas or parts of states.

For example, the state of Illinois has several programs for businesses, some limited to Chicago, some to outside the Chicago area. California has state wide programs, and specific areas such as Sacramento and San Francisco have their own programs.

I live in St. Louis and our local tech incubator, which does lots of small business development, is networking and sharing links for a variety of regional programs. Your local Small Business Development Center (SBDC) or economic development office will have the best information about programs available just for firms in your area as well as state wide or national programs.

If you haven’t made a relationship with them before, now is a good time to get networked with other businesses in your community. I’m sure District Export Councils and Chambers of Commerce are also trying to identify and share resources with their members. Local business communities and business assistance centers are pulling together to help get us through this pandemic induced economic crisis.

Private lenders, both traditional and the “fin tech” nontraditional lenders, are also offering help. Our new era of “fin tech” where nontraditional lenders and payment mechanisms have grown rapidly is both good and bad—there are new sources for funds and new abilities to move them rapidly, but there is also more possibilities for fraud and for nontraditional intermediaries to have liquidity issues. Exercise caution.

Do due diligence before you agree to anything. And, don’t forget that the government resources may be grants, which directly contribute to your bottom line, even if they might take longer to access.

I plan to talk with you about exporting when we meet in Atlanta at IWF 2020, but in the meanwhile I’m happy to answer questions and make referrals to resources, whatever will help you move forward with your business.

Reach Laurie Wolff c/o IWFNetworkNews@iwfatlanta.com

The New CARES Act Lets You Seek a Payroll Tax Credit of $5,000 Per Employee

4. April 2020 13:52

By: Laurie Wolff, Certified Global Business Professional

Is all well or at least okay with your business? In my last post, I described a payroll grant program that has just become available for businesses under pressure by the current health crisis. 

The Paycheck Protection Program offers small businesses loans that can be forgiven if all employees are kept on payroll for eight weeks and the loan is used for payroll, rent, mortgage interest and utilities. The forgiven amount has to have at least 75 percent related to payroll expenses, but other expenses can be part of the loan package. 

If you qualify as a small business, you can get a government loan that becomes a grant based on maintaining your payroll. Even if times are still good, this will increase your bottom line and allow you to invest in future opportunities. If times are tough, this is a potential life line to hold out until we get through the pandemic induced shut downs.

If taking advantage of a loan turned grant from the SBA isn’t right for you, then consider a couple of other options created in the recent government stimulus package.

For example:

  • You are eligible for a payroll tax credit if you have maintained employment and don’t seek or obtain an SBA loan. The credit is equal to 50 percent of wages and includes qualified health expenses. This is up to $10,000 gross paid out for wages and health benefits per worker, so the credit would be $5,000 per worker.
  • You can claim the credit against quarterly payroll taxes or take advance payment of the tax credit if you need cash now. Please talk to your accountant and claim this tax credit if you are eligible.
  • You also can defer your portion of payroll taxes, which is 6.2 percent of payroll. It won’t in the end save you money, but it will improve your cash flow now. The repayment schedule is stretched out to 2021 and 2022.

I will address this theme in other blogs but I want to hit home with you that the firms that expand, that buy capital and invest in developing new customers and new markets in the down times are best situated to grow and gain market share in the next up cycle. If you are healthy now, please deploy resources so that you can thrive when we get through this pandemic.

Economic expansions do not die of old age, and our underlying economy is strong. We just lived through the longest expansion ever. Our underlying capacity is amazing. We got hit with a shock that for once is not really economic, not about liquidity or the financial system, or anything else that we usually would label as causing a recession.

We have a health crisis which is making all of us make different choices than we usually would make. We will have the worst numbers ever in jobless claims, unemployment and decreased production. It will be a sharp downward move and bad in most measurable ways.

But we are also doing the largest stimulus ever and have the best underlying productivity ever. Jobless claims are so high because the technology is there to immediately make them, and the funds are there to pay them. It will help stabilize spending.

I like to think of the really bad numbers as a really good sign that we are on top of this. Be strong and prosper. (My scify fandom is showing but I want to encourage you that we will get through this.)

I plan to talk with you about exporting when we meet in Atlanta at IWF, but in the meanwhile I’m happy to answer questions and make referrals to resources, whatever will help you move forward with your business.

Reach Laurie Wolff c/o IWFNetworkNews@iwfatlanta.com   

The New CARES Act Is Aimed at Helping You With Worker Payroll. Here's How to Tap It

3. April 2020 16:01

By: Laurie Wolff, Certified Global Business Professional

My guess is you are struggling with the economic impact of COVID-19. Some of you have new opportunities, given the need to retrofit spaces to protect employees and possibly even to produce high need items to fight the pandemic. Some of you can still operate normally. Others are facing state-wide stay-in-place orders that are challenging operations. Still more are seeing large decreases in your booked business and are having to lay off workers and manage your cash flow.

Help is on the way. But you will have to actively engage if you want to take advantage of any of the programs. I will have blogs on several opportunities but for this one I’m focusing on one program offered through the Small Business Administration (SBA).

Part of the CARES Act (the recently passed more than $2 trillion stimulus package) is directly aimed at keeping people working in small businesses across the country. Even if all is great for you right now, pay attention and consider applying. If you qualify as a small business, you can get a government loan that becomes a grant based on maintaining your payroll. Even if times are still good, this will increase your bottom line and allow you to invest in future opportunities. If times are tough, this is a potential life line to hold out until we get through the pandemic induced shut downs.

The Paycheck Protection Program offers small businesses loans that can be forgiven if all employees are kept on payroll for eight weeks and the loan is used for payroll, rent, mortgage interest and utilities. The forgiven amount has to have at least 75 percent related to payroll expenses, but other expenses can be part of the loan package. 

Consider including expenses related to business expansion. The can include attendance at trade shows such as IWF 2020, which allows you to meet new customers or find new suppliers. I advised another small business I work with to include in his loan package funds to relocate part of his business to business sales effort - which now can’t happen in person - to an online platform. Are you getting the idea? 

 


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The loan has a maturity of two years, no payments for six months, and an interest rate of 1%. For now the window for payroll is between February 15th and June 30th so firms that have laid off workers can rehire them based on the loan and still qualify. Possibly the government may lengthen the window or increase the total funding level given future need, but for now the authorization is $350 billion. Loans can’t be for more than $10 million and most will be small.

You need to have a relationship with a banker to get this loan. Many banks that previously did not do SBA loans are seeking approval to make them for their customers. The existing SBA lenders, including the large national banks, are saying they will not be able to expand beyond their existing customers. If your bank isn’t trying to become a lender under this program, my best advice is to talk with the other banks in your town or region to find someone willing to work with you. While the loan is guaranteed by the government, the banks still have to do diligence and so the best situation is to work with a bank that already knows you and your operations.

I hope that the business owners that attended my IWF 2018 workshops on expanding their business through international trade stepped out, followed my advice, and got SBA loans because that now is advantageous. If you already have a SBA loans, it makes it easier to get this one, and the SBA has two programs open to extend payments or add extra lending to their existing clients’ loans.

To qualify as a small business, you generally have to have less than 500 employees, but you can go to SBA.gov to see if your business qualifies. Information about this and other programs is available there, but really, truly for this program you need to talk to your bank to see if they are ready to accept applications and if not, call around town to find a bank that will.

More on other opportunities in future blogs, but all the best as we try together to get through these challenging times!