We've been pumping out so much information that I thought it might be useful to step back and give some unsolicited advice to businesses throughout the Great Falls trade area. It seems like forever since I sent out recommendations on March 31st.
Payroll Protection Program Loans
Business owners are always hesitant to take on debt, especially when revenue has dropped and the future is so uncertain. However, if you have not already done so, I encourage you to consider applying for a PPP loan. Self-employed entrepreneurs and owners who take much of their compensation in draws are now eligible.
A 1.0% percent two-year loan with no points or fees is a pretty good deal. The forgiveness feature is an added bonus, IF it works for your business. Only you can decide that. To qualify for forgiveness, your payroll expense for the eight week period starting the day your loan funds must equal at least 75% of your average payroll over a 12-month period ending February 15th. If you have laid-off employees or cut their hours, you would need to bring them back on payroll enough to be sure you qualify for forgiveness. Read through all the guidance on SBA's website and talk with your banker to decide if this feature will work for you.
Unfortunately, final guidance on the PPP loan forgiveness has not yet been issued, but I am fairly confident that if you meet the payroll 75% test, then you will qualify. Be sure to read the details on the program as well as the loan document, and keep very good records during the 8-week period. I'm also confident that the program will not run out of money.
SBA Disaster EIDL Loans
If you come to the conclusion that you can handle more long-term debt, consider applying for an SBA disaster loan. I would recommend doing so soon as I am not as confident that this program will receive enough funds for all businesses that apply. Again, read the program details on SBA's web site and talk with your banker and advisors before signing loan documents.
Other Sources of Cash
As always, your best source of cash comes from your business operations. We have published a Crisis Toolkit and a Hibernation Toolkit with some ideas for generating cash and a framework for thinking through how to survive whatever level of hibernation your business is in. We plan to publish a Toolkit for Essential Businesses next week to give some ideas for businesses that are facing challenges continuing in operation, then will follow with a Getting Ready for Reopening Toolkit.
All of these resources are available on our website. We'll continue to host virtual meetups and webinars that I hope some of you have found helpful. And, our business advisors are working overtime to assist businesses one-on-one.
GFDA has cash available to lend to businesses, non-profits, instrumentalities of government, developers, and gig or self-employed entrepreneurs. So, if you have fallen through the cracks and either don't qualify for PPP or EIDL, or if you need a short bridge loan to get you through until these fund, let us know. If you have available resources or if your bank or credit union can help, please turn to these sources first as our available loan capital is limited. We're working to get more. Unfortunately, we don't have the resources to offer grants or forgivable loans, and can't match match the 1.0% or 3.75% rates of the PPP and EIDL loans (2.75% for eligible non-profits for EIDL).
Help Your Fellow Entrepreneurs
Our eblasts and social media posts don't reach every business, self-employed entrepreneur, non-profit or developer in the Golden Triangle, so if you know of a business that is struggling, please forward this to them and encourage them to sign up for our emails (link below). National estimates are that 7.5 million businesses may not survive the COVID crisis. We need to work together to lose as few as possible here in our communities.
Optimism
Admittedly, I'm an eternal optimist. I know how difficult these weeks have been. It is so heartening to see the entrepreneurial spirit thriving everywhere I look in the region with businesses innovating new ways of operating, giving back so generously, and keeping spirits up. New businesses continue to open in the midst of all this, and many projects in our pipeline continue to move forward. We are going to come out of this with stronger businesses, hungry consumers, and new opportunities.
However, the economic hardships today are very real and will persist. In the long ago past, our nation survived epidemics far worse and recovered. It's going to take hard work, innovation, and risk-taking. One of our tag lines is,
Untame Your Entrepreneurial Spirit. It is going to take an abundance of that.
Succession
If you know of a business owner who decides that now is the time to sell or close their business, please let us know. Perhaps we can connect them with a new or existing entrepreneur who sees opportunity. It's much easier to keep a business going than to start from scratch.
Tomorrow is Easter, a day of pure joy. Take care, get some rest, and know that the GFDA team is here to help. We truly appreciate what you, your hard work, and your Montana entrepreneurial spirit.
Happy Easter!
Brett
Brett Doney
President & CEO
