Liquidity Advice for Independent Printers
During this ongoing health and financial crisis, the key to survival of any company will be the ability to obtain and retain cash until the nation fully regains its footing.
Even as communities reopen and restrictions lift, many print businesses are confronting diminished or non-existent revenues, employee furloughs or layoffs, and negative impacts on personal finances.
Below are highlights from a comprehensive liquidity guide Alliance Franchise Brands created for our franchise system to assist in finding sources of cash and government support programs during the pandemic.
I’ve adapted some of these resources and suggestions for independent print businesses facing the mid-stage of the pandemic.
Some of these resources and strategies you may be familiar with, should all be considered as your small business examines its current cash flow to prepare for the balance of the year.
Utilize Small Business Aid
Owners of small businesses including independent printing operations should continue to consider all sources of funding, such as:
- Current Insurances
- Home Equity Lines of Credit (HELOC)
- IRA/401K Accounts
- Portfolio Loans
- Signature Loans
If you hold an SBA loan (or are due to receive one), you can "keep" cash by taking advantage of stimulus bills which include funding for a provision to provide immediate relief to small businesses with standard SBA 7(a), 504, or microloans.
Under this provision, the Small Business Administration will cover all loan payments for existing SBA borrowers — including principal, interest and fees — for six months. You must verify these parameters with your chosen lender. This relief will also be available to new borrowers who take out an SBA loan within six months of the Coronavirus Aid, Relief, and Economic Security (CARES) Act becoming law. These programs do have approaching deadlines, again, please check with your lender to understand all of the particulars.
State Programs and Emergency Information
In addition to federal liquidity programs available to small businesses, there are numerous state and local assistance programs that may be able to provide faster funding.
While the amounts available are typically smaller than those available from the federal government, these resources can often provide the cash needed to help keep you operating while other funding becomes available.
You can find a link to every state and the programs they have in place to assist small businesses at Coronavirus (COVID-19) Small Business Resources.
Explore Private Sector Financing Programs
The government is not the sole source of financial aid during this time; many larger companies are also willing to provide aid to small businesses. Searching for local and national private funding is a great way to discover additional financial support opportunities.
Facebook, Bumble, US Bank, Wells Fargo – these are just a few of the international companies who have made millions of dollars in private financing available to small businesses during the pandemic. There may be even more options available from local companies in your market or community.
Reexamine Contracts and Debts
Communicating early and often to negotiate new terms on your financial obligations is a smart move even if your business is feeling the effects of recovery. During the beginning of the pandemic, you may have already requested to defer rent payments, renegotiate vendor contracts and refinance loans. But no matter what conversations you had earlier in the year, now is still a good time to reread all the fine print of your contracts, revisit and if necessary renegotiate the terms of engagement keeping in mind unforeseen events such as another serious economic downswing caused by the pandemic.
The Role of Your Advisors
Before you act on the information presented here, you should consult with your attorney, banker, CPA and other advisors. They will help you assess how these provisions might apply to your situation and what state and local rules or legislation may come into play.
While there are many strategies to protect your business against the ongoing impacts of the pandemic, maintaining liquidity has shown to be key to the survival of many small businesses over the past several months. While independent printers may not have a network to draw from in event of emergency, we can all use what we have learned so far to plan for future difficulties. I hope these resources and advice are helpful for print businesses throughout our industry. After all, we are in this together.
Mike Cline is VP of Franchise Development at Alliance Franchise Brands, 47585 Galleon Drive, Plymouth, MI 48170. He works with independent print and sign businesses interested in accessing the many benefits of franchise network participation. He can be contacted by phone at 800-445-5172 or by email at firstname.lastname@example.org.