The Federal Relief Program and Mitigating Risks During the Covid-19 Disaster


This article explores two issues relevant to small business today. First, the Federal Relief program for small business, and second a general framework for maintaining your small business during a disaster.

I.
The CARES Act and Existing SBA Relief Programs

As we all work together to slow the spread of COVID-19, more of us are staying at home, reducing our spending, working from home, and temporarily shutting down or reducing the output of our small businesses. These efforts will help save countless lives during these uncertain times. The Federal Government has issued the largest private financial relief package, the CARES Act, in all of this nation's history to help small businesses adversely affected by the virus. In recent days, the Federal Government passed a second round of relief for small business which is slated to focus on mom and pop shops.

The original CARES Act was signed into law on Friday, March 27, 2020, which includes, $376 billion in relief for American workers and small businesses. The funding dried up within weeks, and on April 23, 2020, Congress approved a second round of funding. There are several funding options for small businesses during these uncertain times, including:

Paycheck Protection Program
The paycheck protection program will provide a loan to small businesses who retain their employees during the COVID-19 outbreak, and if such employees are retained and kept on payroll vial the Paycheck Protection Program, the government may forgive the entire loan. If you had to furlough employees or otherwise fired them, the PPP will provide funding if you re-hire your staff.

EIDL Loan Advance
The EIDL Loan Advance is available to limited small businesses, mostly those who are sole-proprietors, and will provide the small business with up to $10,000 in economic relief. As of the writing of this article, the SBA has closed the application process, and will continue to process existing applications on a first-come-first serve basis.

SBA Express Bridge Loans
If you already have a relationship with the Small Business Association, i.e., you were initially funded by the SBA when opening the business or otherwise, you may be eligible to receive up to $25,000 in a short period of time. 
SBA Debt Relief
If you have long-term debt or short-term debt which is entering or in default, the SBA may provide financial assistance and help grant you relief from those debts.

Each small business owner should be mindful of the expenses which may be covered by any of these programs. The relief package is slated specifically to maintain the business running, and so the owner should only use these funds for necessary expenses. 

II.*
Managing Risk in a Small Business Setting
If you are a small business owner, hiring out for a consultant to provide you with a framework to survive under economic collapse may not be financially feasible. The following points provide a map during these rainy days.

1. During these times small business should conduct an inventory of business assets, goods or services, software, hardware, client files, locations, and amounts.

2. Identify the types of risks involved for each type of asset identified during the inventory, and determine the impact which the disaster will have on each type of asset. During the time of Covid-19, This may include taking measures to decrease the spread of Covid-19 among your staff and patrons.

3. Identify the critical aspects of your business and determine how to best retain its functionality. E.g., many restaurants have responded to the disaster by offering delivery or take-out options which were previously unavailable to its clients. Is your business able to offer its critical services without the in-person meetings, if so, work toward success.

4. Define a Recovery Plan. Specify timelines to achieve certain mitigation goals and plan for an upswing in business when this is all over. 

5. Identify any off-site services which will help retain the value of your assets and preserve their utility, i.e., digital storage of files, preservation or immediate sale of perishable goods, etc.

6. Delegate duties to responsible individuals within your organization who will successfully meet your objectives during the disaster. As an owner, maintain a seat of oversight for any troubleshooting and to keep your deadlines in mind.

7. Review your agreements with service providers, vendors, leases agreements, telecommunications providers, utilities, etc. Your delegates may be able to negotiate more favorable terms, and efficiently allocate resources toward the end of the this pandemic.

8. Get to work! This may include getting workstations to your employees homes so that they may comply with the stay-at-home orders.

III. 
Conclusion
As our health workers and essential workers are maintaining a slow moving economy at this time, it is important to continue our operations and focus on getting out of this disaster with a goal in mind of rebuilding our communities and our businesses. I encourage you to review the options which are listed here and to keep yourself informed of future developments. 


* Special thanks to Nefra MacDonald, and Clio for their webinar, Disaster and Succession Planning for Law Firms: How to Prepare for Unpredictable Events, April 7, 2020, from which Section II. of this article is derived. @nefra_ann linkedin.com/in/Nefra-MacDonald nefra.macdonald@clio.com 888-858-2546 www.clio.com. 

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