Fortify Your Small Business Finances - Momentum CFO · 2020. 7. 29. · Fortify Your Small Business...
Transcript of Fortify Your Small Business Finances - Momentum CFO · 2020. 7. 29. · Fortify Your Small Business...
Fortify Your Small Business FinancesPresented by Rosemary Linden on July 23, 2020
Momentum CFO
• Rosemary Linden | Presidentwww.MomentumCFO.com
• Outsourced Chief Financial Officer services for small to mid-size businesses • Increase profit• Improve cash flow• Plan and forecast• Make better financial decisions• Fortune 500 financial expertise
without the expense of a full time CFO
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Topics for Today
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Financial Assistance Programs
Managing Your Finances in Uncertain Economic Times
Financial Assistance Programs
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Financial Assistance Programs
Of businesses that fail do so because they lack sufficient cash!
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The Paycheck Protection Program and SBA Economic Injury Disaster Loans provide funds to help your business weather the pandemic
Paycheck Protection Program
• Forgivable loan program to help small businesses cover payroll costs, rent, mortgage interest, and utility payments.
• Primary goal of program is to help business owners retain workers and maintain payroll
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Potentially FREE money!
Paycheck Protection Program
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PPP Loans
Eligibility Small businesses, generally with up to 500 employees (see size standards)https://www.sba.gov/federal-contracting/contracting-guide/size-standardsSole proprietors, independent contractors, self-employed individuals
Been in business since 2/15/20
Amount 2.5x average monthly payroll costs Ask your payroll provider for PPP reports for your application
Interest rate Currently fixed at 1%
Loan term 5 years; payments deferred (interest accrues during deferral period)
Where to apply Apply with your bank or find another approved lender here: https://www.sba.gov/paycheckprotectionMust apply by 8/8/20!
Paycheck Protection Program Loan Forgiveness
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• Use the funds within the 24 week “covered period” after loan origination
• Spend at least 60% of funds on payroll and remaining 40% on mortgage, rent, and utilities
• Rehire employees and restore pre-covid wage levels by 12/31/20 (with some exceptions)
How to Apply for PPP Loan Forgiveness
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• Apply with your lender
• SBA published new forgiveness applications:• 3508 EZ form• Check EZ eligibility • 3508 form
• Keep good records; obtain PPP forgiveness reports from your payroll processor
• Apply for forgiveness within 10 months after the last day of the “covered” period
SBA Economic Injury Disaster Loan (EIDL)
• Separate program from PPP
• Can have both a PPP and EIDL loan
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• Loan to help small business owners stay afloat during disasters such as the covid-19 pandemic
SBA Economic Injury Disaster Loan (EIDL)
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EIDL Loans
Eligibility Creditworthy small businesses with 500 or fewer employees, sole proprietors, independent contractors, self-employed individualshttps://www.sba.gov/federal-contracting/contracting-guide/size-standardsBeen in business since 1/31/20
Amount Up to $150K
Interest rate 3.75% for small businesses, 2.75% for non-profitsNo loan forgiveness
Loan term Up to 30 years; payments deferred for one year (interest accrues during deferral period)
Where to apply SBA site: https://covid19relief.sba.gov/#/ by 12/31/20
Other Financial Assistance Programs
• Federal• Potential new programs coming soon; Congress
haggling over the details
• Local• San Diego small business stimulus grant
https://www.sandiegocounty.gov/stimulusgrant/
• Google search other programs specific to your location and industry
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Managing Your Finances in Uncertain Economic Times
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Managing Your Finances in Uncertain Economic Times
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Comply with health and reopening regulations
Understand your numbers
Maintain cash and P&L forecasts
Manage expenses carefully
Prepare for a future emergency
Get professional financial support
Comply with Health and Reopening Regulations
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https://www.sandiegocounty.gov/content/sdc/hhsa/programs/phs/community_epidemiology/dc/2019-nCoV/reopening.html
Understand Your Numbers
• It’s essential to routinely review and understand your financial results
• Timely, accurate, and meaningful monthly financial reporting provides information to successfully manage your finances
• Compare results to your budget to identify where you’re getting off track so you can take corrective action
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Cash Forecasting
• Your bank balance is not a cash forecast!
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Beginning bank balance
+ Cash inflows
- Cash outflows
= Ending bank Balance
• Basic concept:
• Maintain a cash forecast to identify cash shortages before they happen
P&L Forecasting and Scenario Planning
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• Forecasts help project your profit or loss for the year
• Develop projections for the best, most likely, and worst-case scenarios. “What if X, Y, or Z” happens?
• Include alternate ways of generating revenue, such as digital sales
• Identify expenses to reduce or eliminate based on various levels of income
“A goal without a plan is just a wish” –Antoine de Saint Exupery
Carefully Manage Expenses to Conserve Cash
• Reduce or eliminate non-essential expenses
• Request payment deferments and keep track of deferred expenses
• Renegotiate longer payment terms with vendors
• Refinance high-interest rate debt
• Consider using an invoice factoring company to get cash faster, but be sure to understand their fees
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Plan for Future Emergencies
• Build an “emergency fund” equal to three or more months of expenses
• Apply for a line of credit to draw from during emergencies
• Identify alternate vendors to supply goods and services you need to operate if your primary vendors can’t deliver
• Document business continuity and disaster recovery plans
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Momentum CFO is Your Strategic Partner
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Services we offer include:
• Financial “Health Check”
• Monthly financial review & analysis
• Cash and P&L forecasting
• Scenario planning
• Ongoing outsourced CFO support
Special Offer
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First project or month of service for webinar attendees
Book a free introductory consultation via website www.MomentumCFO.com
Find articles about the information we’ve covered today on the Resources page
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Rosemary Linden | [email protected]
www.MomentumCFO.com858.284.0314
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Questions?