Thanks for joining us

Follow up to Financing and Cash Flow during Covid-19

Thank you so much for joining us last week for our Meetup on Financing and Cash Flow during Covid-19.

Our panelists

Amy Kanzleiter: Small Business Accountant at Acuity

akanzleiter@acuity.co

Founder of Mamie Boutique 11 yrs, a multichannel apparel business, that she sold. She is now an e-commerce accountant, large companies - she works with businesses between $0-100mil in sales annually and has managed teams of accountants in the process.

Mike Deeks: Account Director at Clearbanc

michael.deeks@clearbanc.com

Mike Deeks is an Account Director for Clearbanc, the fastest, most affordable way to fund your business eCommerce. He maintains over 100 companies in his portfolio ranging from $250,000 to $5,000,000, all receiving funding without giving up equity or guarantees.

Joseph Dunne: Assistant Vice President at Guaranty Bank & Trust

jdunne@gnty.com

Assistant VP at Guaranty bank, a relationship bank. Rising star in small business lending. He supports small to mid-sized businesses in Texas and has been boots on the ground with PPP, EIDL and all the other gov’t lending options. He’s passionate about Faith, connecting with people, getting to learn what makes people tick, being in the outdoors, reading, rock climbing, and listening to stories – narratives both from people and businesses.

Mark Lupton: Partner & Fractional CFO/COO at Amplify

Mark@amplifycoo.com

Mark Lupton is Partner & Ecommerce Fractional CFO/COO at Amplify. He helps small businesses find hidden profits and avoid cash flow problems. Mark also serves as co-host of the Austin Shopify Meetup (1000+ members). He holds an MBA in entrepreneurship and engineering bachelor’s degree.


Discussion notes

What is the latest on government funding options?

Joseph Dunne
  • The Paycheck protection program is still in effect and is taking applications, there is around $50 billion still unused.

  • Turn around time from application to funding is about 7 days with Guaranty Bank

  • Contact Joseph about getting PPP through Guaranty Bank & Trust

Amy Kanzleiter
  • There could be a possible third round of funding. As of May 8th, there was still funding available in the current round.

  • If you have not gotten PPP, try reapplying with your bank or a different bank. Bank by bank restrictions have been easing as to who they will grant funds.

  • Focus on a paper trail to prove forgiveness

Mark Lupton
  • My clients have seen faster PPP success with smaller banks

  • Ask local banks about their PPP availability for non-customers

What other financing options are available?

Joseph Dunne
  • Alternative Government option: Main Street Lending program, which is catered to bigger companies.

  • The loan size ranges from $1-25 million and the repayment is over 4 years as opposed to the 2 years with the PPP.

  • Local banks that are still looking to make loans at this time.

  • Times are unique so I can’t say banks will always or often extend credit to hold a company over but it’s worth asking

Amy Kanzleiter
Mike Deeks
  • Clearbanc funds core growth functions like:

    • Marketing dollars and software

    • Inventory

    • Product launches

  • Fast turnaround time (record of 6 hrs!)

What is the right financing for me?

Joseph Dunne
  • PPP loan is a good option even if it’s not forgiven. We don’t know how long the recovery is going to take, so even if you have to pay it back over 2 years at 1% interest, that’s better than having no cash at all.

  • The answer really comes down to rate/repayment term/recourse or non-recourse.

Amy Kanzleiter
  • Credit Cards 30 - 60 days - cover short cash cycles

  • Revolving line of credit - smoothly annual seasonality

  • One-time Term Loan - Bridging to new profitable normal

Mike Deeks
  • You can OVER-leverage your business

  • You can never have too much ACCESS to capital

  • There is a relationship component of financing

Mark Lupton
  • Don’t let coronavirus be the first step in a vicious debt cycle. Have a plan.

  • You need a plan to your new, profitable normal.

    • If you don’t currently have the tools to build a plan, it truly is a vital investment in your business.

Where can I find hidden cash in my business?

Amy Kanzleiter
  • Pivot on your core strength.

    • Make a list of pivot ideas, discuss with the team. Make an action plan.

  • You are the best driver of your revenue

    • Delegate non-revenue driving tasks to others or banker or accountant

  • File for your tax refund now

    • If you did not receive funding you are potentially eligible for a tax credit

  • Ask for Deferrals:

    • Federal Social Security tax deferral

    • Debt payments

    • Rent

    • Inventory

    • anything...

  • If you’re doing pay cuts, have a weighted pay cut system where those making the most have larger percentages cut vs lower wage employees.

Mark Lupton
  • There are lasting cuts and temporary cash sources

  • Lasting:

    • No. 1 place to find hidden cash is with your customers.

      • The way customers relate to your brand/product has changed for better or worse.

      • Focus less on optimizing ROAS around past campaign success and more on the new normal

    • Variable costs cuts (COGS, Shipping, etc.) create lasting savings

      • Deep shipping costs / packaging optimization

      • Negotiate down minimum order quantities (MOQ)

    • Overhead

      • Look at every line item on your P&L in quickbooks and review each transaction -- may be thousands hiding

  • Temporary sources (buy you time to get to your new normal. )

    • External financing

    • Deferrals

    • Discounting / Bundling excess stock

Joseph Dunne

We are encouraging people to cut costs as much as possible but also suspending loan payments for at least 90 days, which can free up cash in the present. Partial paycheck cuts instead of complete job cuts are being used to free up cash also.

Mike Deeks

I’ve seen clients completely repurpose facilities and production to make masks and other needed products during this time

What do I need to be tracking?

Amy Kanzleiter
  • Once you receive PPP or EIDL

    • You are on an 8 week clock and it's important to start gathering and keeping track of the expenditures.

    • Focus on the loan forgiveness calculations.

    • Reach out to your bank for guidance.

  • A 12-week cash plan is key right now. monitor cash tightly.

  • Moving forward - plan for uncertainty including resource and supply chain interruptions.

Mark Lupton
  • Top 3 things to track and plan:

    • 1 - Cash Balance (bank account minus outstanding debt)

    • 2 - Cash Flow (withdrawals & deposits on your accounts)

    • 3 - Cash Runway (time until you run out of cash OR want more for growth)

  • Free 13-week cash flow planner at www.amplify.business

Joseph Dunne
  • For the PPP program, we are asking our customers to track where the money is going (payroll, rent, utilities) like your life depending on it.

    • Ultimately the government has to decide what is forgivable.

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