The COVID-19 pandemic and associated economic crisis appear to be continuing into the foreseeable future. Sadly, small to medium-sized businesses (SMBs) and managed service providers (MSPs) are having a tough time getting guidance from the Small Business Administration (SBA), federal and state governments, and even their banks as they seek emergency loans and grants to keep operations going.
One loan in particular, the Paycheck Protection Program (PPP), is a forgivable loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. We connected with two of our MSP partners – Gloria Burt from Technology Group Solutions (TGS), and CJ Black from Oscillas Technologies Inc. – to get their survival tips for navigating the process.
1. Start, or join community conversations with peers, clients, and even your competition.
Utilize the community you have around you. Share connections, discernment and industry knowledge to help not only yourself, but other SMBs navigating the same systems. Taking the approach that we’re all in this together may be the key to surviving, and even coming out stronger on the other end.
Gloria, the President of TGS, took an active role in bringing together like-minded business people to the benefit of everyone involved.
“When this all started back in March, I was a bit panicky. I knew we’d need to apply for some sort of the federal stimulus money, but then I realized that there was no way I could work and run the business while applying for this type of aid. So, I started an anonymous email chain/blog. It started as anonymous because I wasn’t sure how many people would like to share this type of sensitive information about their business.
As the conversation started, old retired friends in the industry and other local businesses started sending around links to all sorts of educational resources. We started going to these webinars and began collecting this information for our clients and colleagues. We’re at about 60 people now on this list and at very least this gives me something valuable to talk to my clients about right now.”
2. Be aggressive!
The systems processing these loans are stressed and weighted down by an influx of applications. You have to constantly be following up on the status of your application with your banker. Set notifications on your calendar to check in, get direct contact information for your bank representative, and don’t be afraid to make your voice heard in order to keep your request moving.
Gloria talks about her face-to-face approach for getting her questions answered, “We’ve filled out the online form nine to 10 times and the last couple times we were with a loan officer. The first five to six times we didn’t hear anything! So, we’d end up driving over to the bank and would wait for anyone to give us some answers on our status.”
3. Reach out to community and local banks.
Over the past two months there have been plenty of horror stories about big banks overwhelmed with SBA loan requests, poor follow-through, and even fraudulent activity. Take advantage of the fact that a large portion of the second round of PPP loans was pushed to lending institutions with asset sizes of less than $1 billion. With funds now flowing to local community banks, which traditionally serve SMBs, you’ve got a better chance of getting relief.
CJ, the President and CEO at Oscillas, found relief not through his Chase Bank, but through a community bank in southern Illinois.
“We applied with Chase Bank within an hour of their application becoming available. We thought that because we were prepared and aggressive with timing that we would be at or near the front of the line. Saying that now feels naïve, especially after reading about how they prioritized larger clients at the expense of small businesses like our own.
We knew that we had to take action to have a shot at being funded in the program’s second round. A client of ours turned us to a community bank from a small town in southern Illinois. We didn’t have an account, and to be honest I hadn’t even heard of the town before. That didn’t matter to them, they took us in as though we’d been with them for years. The bank’s CEO even contacted us to welcome us and offer his help.
We’re going to be moving our entire deposit relationship there inside of the next two weeks. We learned a lesson the hard way about the institutions that we choose to work with, but I think that we’re going to come out of all of this stronger than ever thanks to their help.”
4. Get creative in getting through this.
Unfortunately, loan applications will continue to be delayed and the needs of SMBs and MSPs stretch beyond just financial. Luckily, there are other resources ranging from logistical and legal, to even mental. For a complete list of opportunities extended to small businesses during this time, visit the University of Chicago’s COVID-19 Small Business Resource Center.
Additionally, CJ calls on SMBs to think outside the box during while navigating a global phenomenon we’ve only seen in movies. Of course accessing available resources is part of continuing business, but it’s not the only move you can make.
“During times of crisis it can be easy to develop tunnel vision. While it’s more important than ever to have a laser-focus on your bottom line, make a conscious effort to step back and use the creative problem solving skills that put you into business in the first place. We all fall into the trap of firing off an email or a form and hitting refresh over and over.
Pick up the phone. Call the Mayor’s office. Call that client that was never interested in additional service, or that big prospect that’s been punting for four quarters in a row. Remember that this is everyone else’s first global pandemic too, and they’re just as confused as you are. Ask for what you need, make the pitch that would never otherwise work, and get creative in the face of adversity. As Hunter S. Thompson once wrote, ‘When the going gets weird, the weird turn pro.’”
About the Author: Dom Scafidi // Digital Marketing Specialist, Axcient