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Small businesses are facing unprecedented challenges in the face of COVID-19.
As this pandemic impacts the lives of millions, we are working diligently to ensure you have access to the information and resources you need to navigate these challenges.
Today, we are highlighting key thought leadership, funding options, and other useful resources around the COVID-19 outbreak to help you make informed decisions about your business.
The following insight comes from some of our technology partners, our in-house team of funding experts, and other resources we believe are helpful to small businesses, accountants, and others with a stake in the future of our clients. [Please note, this guide is subject to revisions and additions as new resources become available.]
Stay Informed With Government COVID Guides
First, we recommend that you read the latest COVID-19 guide for small businesses by the U.S. Chamber of Commerce. It outlines critical day-to-day decisions you may face around remote work, employee flexibility, customer communication, business insurance, and long-term strategies. The resource guide is extensive and covers a range of topics from work policies to small business funding options.
In addition, please visit Canada’s COVID-19 Economic Response Plan: Support for Canadians and Businesses. This site provides details on the government’s plan to provide up to $27 billion in direct support to Canadian companies and their employees.
Get the Small Business Funding You Need
This period of uncertainty places a very high priority on cash flow for businesses.
At FundThrough, we can provide small businesses with working capital in exchange for outstanding invoices. However, this is not your only funding option during this period of uncertainty.
We have identified two extensive lists of funding options for our Canadian and U.S. audiences.
If you are a Canadian company, please visit Hockeystick’s list of Active Funders in Canada. This list helps match companies with potential funding options and provides insight into the various alternative finance companies and the types of businesses that they fund.
American companies may consider this list of Federal, state, and private resources available from Gusto, a payroll company and partner of FundThrough. The company updates this document on a regular basis, so check back each day to determine the mix of public and private resources in your state.
We are witnessing a herculean effort by the public and private sector to ensure that companies can obtain the working capital they need to navigate this crisis. This effort includes the emergence of alternative finance companies who provide innovative solutions to businesses of all sizes.
To learn more about alternative finance and your available options, go here now.
Invoice/Accounts Receivable Best Practices
We aim to get small businesses paid as quickly as possible for the work they have done.
Therefore, it is vital that when you send an invoice to a customer, you ensure you increase the probability of payment that meets the terms of your existing agreement.
- According to Due.com, sellers are three times more likely to get paid if they add their company’s logo to the invoice;
- Sellers are 1.5 times more likely to get paid if they put the payment terms on the invoice; and,
- Sellers are eight times more likely to get paid if they put a due date on the invoice (1 out of 4 invoices do not carry a due date, according to the study).
We have covered these best practices and more at the FundThrough blog.
At times like these, the little details matter. To ensure that you are not overlooking anything as you prepare invoices, use this checklist to ensure you cover all of your bases.
Other Small Business Best Practices
Customer Relationships: Right now is a critical time to be open and transparent with your customers about your relationships. It’s important that you remain positive and work diligently to ensure that you can work together. OnDeck provides a list of best practices on email communications, including customer journeys, personalization, and promotions.
Change Your Perspective: Many companies will be operating on survival mode over the next few months. That’s why it’s critical to change your perspective about how you get paid and where your funding will come from. Today, many people have different perceptions about the source of their funding.
Right now, your customers don’t care how you get your money to keep the doors open. They simply want to know that you’ll be able to survive and thrive and help them on the other side of this crisis. For these reasons, consider alternative finance solutions like invoice factoring or peer-to-peer lending.
Understand Regulations: Where you operate is just as important as your industry. Therefore, it’s critical for you to understand local regulations and how they can impact payment. For example, small businesses in construction may wish to determine their capital requirements ahead of their projects.
Permits, upfront costs, and other capital requirements may require that you obtain partial payment from customers as you begin your projects. Investigate those upfront costs and use these regulations to your advantage to ensure prompt payment for your work.
Other Critical Resources on COVID-19
- Tax Payments: The U.S. Treasury Department announced that American businesses do not need to pay first quarter taxes until July 15. However, we may see additional extensions based on current projections for spread of COVID-19. In addition, companies my consider extending their 2019 taxes through the October extension period. Meanwhile, the Canadian government has allowed companies `to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.” Check back to Canada’s response plan for updates.
- Key Employment Decisions: If the pandemic extends deep into 2020, you may need to make difficult decisions in the future about the future of your business. One of those key challenges may be the decision to temporarily layoff or furlough employees. Understanding the difference between the two scenarios and the legal requirements is essential. Read this quick bulletin from Vedder Price for guidance. SHRM also provides insight into other decisions around reduced hours, pay cuts, and unemployment benefits for employees.
- Case Studies in Invoice Funding: Companies with outstanding customer invoices can consider getting the money they need for expenses in as little as 24 hours. If you’re facing late-paying customers, slow-paying customers, or customers extending their payment terms, consider a fast, alternative way to get paid for work you’ve already done. To learn more, read our latest case study on how invoice factoring helped a small business called Alaska Thermal Fabrications boost its cash flow, meet expenses, and thrive during periods of uncertainty.
- Traditional Loans Vs. Alt-Fi: You may consider going to your bank to seek a line of credit or another loan. However, we stress that competition for limited capital will be significant. Roughly 80% of U.S. small businesses are rejected by banks for loans, according to the Federal Reserve. If you are planning to apply for a bank loan, read our latest insight on how to avoid rejections and ensure you have all the necessary information to boost your chance of success.
Other Key Resources
Finally, we have compiled a list of additional readings and resources that may be helpful.
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