Cash is King

March 25, 2020 – For your business, cash is its lifeblood.  The threat being posed by COVID-19 has led to many small and middle-market businesses to suspend operations while local and state government policies implement workforce reductions in order increase social distancing and flatten the curve. The unprecedented actions are impacting your business in multiple ways, creating challenges with cash flow, customer demand, supply chains and productivity.   Today, significant solutions are available to help you solve these complex issues.

New Legislation

The White House and Senate leaders finalized a major deal early Wednesday morning for a $2-trillion package that provides stimulus to our economy that is struggling amid the coronavirus COVID-19 pandemic.

While the full details have yet to be released, the components of the proposed legislation have come become clearer.   Expectations are that there will be $250 billion set aside for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed businesses.

$425 Billion Emergency Loans for Distressed Companies

For distressed companies, emergency loans will come from a $425 billion fund controlled by the Federal Reserve, and an additional $75 billion would be available for industry-specific loans — including to airlines and hotels.

$367 Billion for Emergency Loans for Small Businesses

The legislation creates a $367 billion federally-guaranteed loan program for small businesses who must pledge not to lay off their workers. Companies with 500 employees or less that keep paychecks steady could get up to $10 million each in forgivable small business loans. The loans would be available during an emergency period ending June 30th, and would be forgiven if the employer continued to pay workers for the duration of the crisis. Federally guaranteed loans will provide eight weeks of assistance for qualifying employers who maintain payroll. Those who meet requirements would have costs such as utilities, mortgage interest and rent forgiven.

COVID-19 SBA Disaster Loans

The U.S. Small Business Administration (SBA) is offering low-interest federal disaster loans up to $2 million for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19) throughout New York State.

Our Financial Advisory Service Team is here to assist you in accessing liquidity and how to respond to changed business circumstances in light of COVID-19 while navigating the terms and conditions of the emergency loan programs identified above.   Our team focuses on helping business owners and companies identify and secure short-term and long-term capital.  Whether it’s domestic or foreign A/R, inventory, purchase order, construction, mezzanine financing, term loans and equity, our team has multiple sources that provide solutions to our clients.