31 Mar The CARE Act and You
We started Comradity to make a safe oasis from day-to-day crises for leaders to focus on growing their business.
But it’s hard to imagine what a safe oasis looks like in this crisis, today and going forward.
Nothing will be the same post-crisis. Habits have been broken. Routines have changed. Everyone, customers, employees, and partners have changed their behavior.
On one end of the spectrum, customers are realizing what they miss – what they “can’t live without.” The other extreme is customers who realize they can live without a company.
Returning to business as usual will not be a safe strategy. The enlightened leaders I’ve known meet change with change. Whether it is to meet high customer expectations under the pressures of pent-up demand or create new value to win customers back.
The Care Act offers multiple funding sources that all incorporate the PPP (Payroll Protection Program).
Here’s a great summary of the Care Act for Small Businesses. I attach my copy because some times these websites are really slow because of the traffic: https://comradity.box.com/s/bl0gz4aqqhu0cb4ehv27vgo7nvykum7y
Here’s a twitter feed of a guy who is answering a lot of questions https://twitter.com/genemarks – you can scroll through to find your question and his answer.
This is where I learned that independent contractors have to choose between the Economic Injury Disaster Loan vs. Unemployment. No double dipping (see the form for the EIDL, it includes both the EIN and SSN for the owner which is how they prevent double dipping). Importantly he says, the former includes deferred income for a start-up. I hear unemployment is taking weeks to deliver money. These loans may be a bit faster since the system is more de-centralized and therefore robust, because you are dealing with a local lender not the SBA. The above twitter guy, Gene Marks, says to search “SBA Loan Banker near me” on GOOGLE to find your local options.
However, the place to start is your bank since they know what kind of risk (or not) you are.
There are multiple SBA loans which are available to Small Businesses and non-profits which all incorporate the Payroll Protection Program. They have different purposes ranging from:
- replacing lost revenues via the Economic Injury Disaster Loan (EIDL) Here’s the form
- financing for improvements, including adding jobs, to maintain/bring business back after the crisis (7a-SBA) Here are the forms 1919 and 1920, respectively.
- capital needs, including real estate improvements 540 Loan Program.
Your bank may have different experts related to each one. (At least that is what we’ve found).
No double dipping. And these have deadlines. That’s why it is important to strategize – imagine what the future will bring, post-crisis, phase by phase.
Are your customers missing you or have they found a way to live without you?
If they miss you, think about what you, your employees, and your partners will need to do differently to meet those high expectations (maybe even a bit romanticized by absence?) under the pressure of meeting pent-up demand. Do you know who your best customers are?
If they aren’t missing you, what could you, your employees, your partners do differently to bring them back? Who are the first customers you want to win back?
I learned early in business that the best way to get through a crisis is to imagine what could be. Even when the worst happens, investing for growth is the inherently safe, lower risk strategy. As Leo Burnett said “when you reach for the stars, you won’t come up with a handful of mud” (well apparently he actually said “shit” but that wouldn’t be an appropriate company slogan”/). My first business experience ever was a crisis as a trainee at Leo Burnett Advertising on the United Airlines account. United was grounded for 50 days during a ground crew strike. There was no playbook to follow. We invented the Frequent Flyer program to bring customers back. But we didn’t get the competitive advantage of surprise when we started promoting it. The day we went on the air, the worst plane crash ever in the US happened and all airlines were grounded and pulled advertising. By the time the industry started flying and advertising again, our competitor AA was ready with their own frequent flyer program. But you know what I learned? When all the competitors are incentivizing customers to fly more, the market grows exponentially and everyone gets a juicy piece of a much bigger pie.
I’m sharing all of this because I believe that when we all take this downtime to connect with our customers, employees and partners to imagine what could be and choose the relevant CARE Act SBA loans (instead of laying off employees and canceling contracts with partners), we may discover that there’s a lot of untapped business growth. That’s why conscious business growth is not just doing the right thing, its good for the business and the economy.