Fortify Your Small Business Finances - Momentum CFO · 2020. 7. 29. · Fortify Your Small Business Finances Presented by Rosemary Linden on July 23, 2020

Fortify Your Small Business FinancesPresented by Rosemary Linden on July 23, 2020

Momentum CFO

• Rosemary Linden | Presidentwww.MomentumCFO.com

• Outsourced Chief Financial Officer services for small to mid-size businesses • Increase profit• Improve cash flow• Plan and forecast• Make better financial decisions• Fortune 500 financial expertise

without the expense of a full time CFO

Copyright 2020 Momentum CFO 2

http://www.momentumcfo.com/

Topics for Today


Financial Assistance Programs

Managing Your Finances in Uncertain Economic Times




Of businesses that fail do so because they lack sufficient cash!


The Paycheck Protection Program and SBA Economic Injury Disaster Loans provide funds to help your business weather the pandemic

Paycheck Protection Program

• Forgivable loan program to help small businesses cover payroll costs, rent, mortgage interest, and utility payments.

• Primary goal of program is to help business owners retain workers and maintain payroll


Potentially FREE money!

Paycheck Protection Program


PPP Loans

Eligibility Small businesses, generally with up to 500 employees (see size standards)https://www.sba.gov/federal-contracting/contracting-guide/size-standardsSole proprietors, independent contractors, self-employed individuals

Been in business since 2/15/20

Amount 2.5x average monthly payroll costs Ask your payroll provider for PPP reports for your application

Interest rate Currently fixed at 1%

Loan term 5 years; payments deferred (interest accrues during deferral period)

Where to apply Apply with your bank or find another approved lender here: https://www.sba.gov/paycheckprotectionMust apply by 8/8/20!

https://www.sba.gov/federal-contracting/contracting-guide/size-standards

https://www.sba.gov/paycheckprotection

Paycheck Protection Program Loan Forgiveness


• Use the funds within the 24 week “covered period” after loan origination

• Spend at least 60% of funds on payroll and remaining 40% on mortgage, rent, and utilities

• Rehire employees and restore pre-covid wage levels by 12/31/20 (with some exceptions)

How to Apply for PPP Loan Forgiveness


• Apply with your lender

• SBA published new forgiveness applications:• 3508 EZ form• Check EZ eligibility • 3508 form

• Keep good records; obtain PPP forgiveness reports from your payroll processor

• Apply for forgiveness within 10 months after the last day of the “covered” period

https://www.sba.gov/sites/default/files/2020-06/PPP%20Forgiveness%20Application%203508EZ%20%28Revised%2006.16.2020%29%20Fillable.pdf

https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-EZ-Instructions.pdf

https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf

SBA Economic Injury Disaster Loan (EIDL)

• Separate program from PPP

• Can have both a PPP and EIDL loan


• Loan to help small business owners stay afloat during disasters such as the covid-19 pandemic

SBA Economic Injury Disaster Loan (EIDL)


EIDL Loans

Eligibility Creditworthy small businesses with 500 or fewer employees, sole proprietors, independent contractors, self-employed individualshttps://www.sba.gov/federal-contracting/contracting-guide/size-standardsBeen in business since 1/31/20

Amount Up to $150K

Interest rate 3.75% for small businesses, 2.75% for non-profitsNo loan forgiveness

Loan term Up to 30 years; payments deferred for one year (interest accrues during deferral period)

Where to apply SBA site: https://covid19relief.sba.gov/#/ by 12/31/20

https://www.sba.gov/federal-contracting/contracting-guide/size-standards

https://covid19relief.sba.gov/

Other Financial Assistance Programs

• Federal• Potential new programs coming soon; Congress

haggling over the details

• Local• San Diego small business stimulus grant

https://www.sandiegocounty.gov/stimulusgrant/

• Google search other programs specific to your location and industry


https://www.sandiegocounty.gov/stimulusgrant/





Comply with health and reopening regulations

Understand your numbers

Maintain cash and P&L forecasts

Manage expenses carefully

Prepare for a future emergency

Get professional financial support

Comply with Health and Reopening Regulations


https://www.sandiegocounty.gov/content/sdc/hhsa/programs/phs/community_epidemiology/dc/2019-nCoV/reopening.html

https://www.sandiegocounty.gov/content/sdc/hhsa/programs/phs/community_epidemiology/dc/2019-nCoV/reopening.html

Understand Your Numbers

• It’s essential to routinely review and understand your financial results

• Timely, accurate, and meaningful monthly financial reporting provides information to successfully manage your finances

• Compare results to your budget to identify where you’re getting off track so you can take corrective action


Cash Forecasting

• Your bank balance is not a cash forecast!


Beginning bank balance

+ Cash inflows

- Cash outflows

= Ending bank Balance

• Basic concept:

• Maintain a cash forecast to identify cash shortages before they happen

P&L Forecasting and Scenario Planning


• Forecasts help project your profit or loss for the year

• Develop projections for the best, most likely, and worst-case scenarios. “What if X, Y, or Z” happens?

• Include alternate ways of generating revenue, such as digital sales

• Identify expenses to reduce or eliminate based on various levels of income

“A goal without a plan is just a wish” –Antoine de Saint Exupery

Carefully Manage Expenses to Conserve Cash

• Reduce or eliminate non-essential expenses

• Request payment deferments and keep track of deferred expenses

• Renegotiate longer payment terms with vendors

• Refinance high-interest rate debt

• Consider using an invoice factoring company to get cash faster, but be sure to understand their fees


Plan for Future Emergencies

• Build an “emergency fund” equal to three or more months of expenses

• Apply for a line of credit to draw from during emergencies

• Identify alternate vendors to supply goods and services you need to operate if your primary vendors can’t deliver

• Document business continuity and disaster recovery plans


Momentum CFO is Your Strategic Partner


Services we offer include:

• Financial “Health Check”

• Monthly financial review & analysis

• Cash and P&L forecasting

• Scenario planning

• Ongoing outsourced CFO support

Special Offer


First project or month of service for webinar attendees

Book a free introductory consultation via website www.MomentumCFO.com

Find articles about the information we’ve covered today on the Resources page

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Rosemary Linden | [email protected]

www.MomentumCFO.com858.284.0314


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Fortify Your Small Business Finances - Momentum CFO · 2020. 7. 29. · Fortify Your Small Business Finances Presented by Rosemary Linden on July 23, 2020