Many companies are struggling to turn a profit amidst the chaos of the COVID-19 pandemic. Greg Wank, leader of Anchin’s Food and Beverage Group, shared some ways that companies can improve cash flow and manage their supply chain during the latest installment of SFA’s Ask the Expert webinar series.
Since projections or budgets that were done in late 2019 or early 2020 are likely now obsolete, Wank recommended revisiting and updating your budget for the reality of the current situation; the more conservatively the better. When rethinking the budget, he said to consider any previously planned customer or product launches that will no longer be taking place, or any new or added risks.
Communication is key while assessing your financial wellbeing, Wank said. He recommednded talking to stakeholders, your employees, and your customers; anyone who is directly or indirectly impacted by your business. There isn’t such a thing as overcommunicating, according to Wank. The more you communicate, the more you learn about your business and about your partners.
If you are having cash flow issues, let people know as soon as possible, he said. In terms of managing cash flow, Wank suggested a few ways that companies can find wiggle room. Company credit cards can be used for additional money and time to pay off debts. In addition, Wank recommended talking with credit card companies or financial institutions to ask for interest relief or payment deferrals. “I’ve been pleasantly surprised by the stories from our clients who are saying how accommodating the finance companies have been in this time,” he said. For existing equipment loans and leases, you can request deferrals or interest-only payment periods to help keep afloat.
If you rent space, be sure to partner with your legal counsel to understand any obligations under your lease. It’s also smart to start a dialogue with your landlord about what is and isn’t included in your lease. Even though commercial mortgages aren’t listed under the new federal provisions like homeowner mortgages are, Wank suggested talking to your lender about extending terms or getting a partial or full deferral.
Managing the Supply Chain
The COVID-19 pandemic has definitely shown companies how important their supply chain and supplier relationships are. Wank suggested partnering with your suppliers to make sure you both come out of this time stronger and better. Ask them about their workforce issues, any product sourcing issues, and how you can become a priority customer. When thinking about how your company can ensure a smoother supply chain, consider which product lines are most profitable and most in demand and focus on those. If you’re struggling, think about how to pivot to other product lines or channels that are in demand right now, he said.
Government Relief Programs
Wank shared a list of federal programs that companies can look to for financial relief during this crisis.
- Paycheck Protection Program Loans
- PPP Loan Forgiveness
- SBA Economic Injury Disaster Loan
- SBA Express Bridge Loans
- SBA Debt Relief for Existing 504, 7(a) and Microloan borrowers
- CARES Social Security Tax Deferral
- CARES Employee Retention Tax Credits
- Families First Tax Credits
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