How Businesses Can Address Financial Issues During COVID-19

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Unfortunately, many businesses have and will experience financial hardships during COVID-19. The St Louis Agency on Training and Employment (SLATE) and Educational Data Systems, Inc. (EDSI) recently partnered to host a webinar titled “COVID-19 Business Strategies for Success” discussing the strategies on how to minimize financial distress during the unprecedented and uncertain times.  Check out a few resources programs and management tools below that were discussed.

Key Programs-Federal

Families First Coronavirus Response Act

  • An expansion of the Family and Medical Leave Act (FMLA)
  • Applies to companies with 50-500 employees
  • Quarantined employees get 2 weeks pay at full pay rate
  • Other reasons, such as caregiver requirements, get paid at 2/3rds pay rate for 2 weeks (caps exist)
  • If home for childcare, after 2 weeks unpaid period, individual can be paid at 2/3rds rate up to ten weeks
  • IRS will reimburse for wages, payroll taxes and benefits
  • Expires 12/31/20

Paycheck Protection Program (SBA)

  • Designed to keep employees employed
  • 100% federally guaranteed loans to small businesses
  • Applies to for-profit and non-profit entities with less than 500 employees (exceptions exist)
  • Loan amounts can be 2.5X average monthly payroll costs (can’t exceed $2 million)
  • Pay per employee is capped at $100,000
  • Some, or all of this loan may be forgiven. Loan is forgiven only on amounts spent in 8 weeks after the loan

Employee Retention Credit

  • Refundable payroll tax credit for 50% of wages paid from 3/31/20 through 12/31/20
  • Credit is based upon payroll taxes paid
  • Credit is capped on the first $10,000 of payroll per employee during applicable period

Save Small Business Fund

  • $5,000 grants available
  • Funded by the US Chamber of Commerce Foundation
  • For Companies with -20 employees
  • Designed for small businesses in economically vulnerable communities

Key Programs-SBA

SBA Emergency Economic Injury Disaster Loans (EIDL Grants)

  • For companies suffering economic injury
  • Funds may be used for fixed debts, payroll, accounts payable and other reasons
  • Up to $2 million at 3.75%
  • No personal guaranty
  • Up to 30-year repayment schedule
  • Advance up to $10,000 available in 3 business days

SBA Express Loans

  • Can be used for a variety of business purposes
  • Maximum loan amount is $350,000 at a variable interest rate
  • SBA guarantees 50% of loan. Other guarantees may be required
  • Loan can be a term loan or a line of credit
  • 36-hour application turnaround time
  • Funds available within 90 days

Key Programs – State & Local

Shared Work Program

  • Allows employers to decrease hours of work while granting partial UI benefits to employees with reduced hours
  • Normal work hours must be reduced by no less than 20% and no more than 40%

Zero Interest Loan Program 

  • For businesses in St. Louis or St. Louis County
  • Up to $5,000 working capital loan
  • 0% interest
  • Demonstrate business has been damaged by the COVID-19 pandemic

GoFundMe Small Business Relief Fund

  • GoFundMe is providing relief grants to qualifying small businesses who raise $500 or more on GoFundMe

On-the-Job Training

  • Provides 50% wage reimbursement for eligible new hires for up to 6 months
  • Dependent upon local approval


Financial Crises Management Tools

  • Create a Stabilization Plan
  • Cash flow management is priority. Manage your cash to get through the crises (ex. cutting back on expenses)
  • Build and utilize a 13-week cash forecast
  • Take advantage of federal and state programs
  • Meet with your lenders immediately
  • Negotiate temporary rental and/or lease payment reductions
  • Stop all non critical spending
  • Get creative and look for alternative ways to grow revenues, cut costs and improve cash flows