“Cash is King” for businesses, especially when they are drifting in the rough currents due to COVID-19. What can technology, services, and life science companies do to survive the challenges and thrive through opportunities in the current economic conditions? Here are a few considerations for innovative companies to manage cash flow since the pandemic’s inception.
Utilizing the CARES Act and New Laws and Legislation
Businesses have been following new legislation closely and, when possible, taking advantage of cash flow assistance from the federal government to increase liquidity.
The following is a list of programs created by the CARES Act that support small businesses:
- Paycheck Protection Program
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress had appropriated $349 billion for the Paycheck Protection Program (PPP), providing loans of up to $10 million to certain qualified small businesses, and also offering forgiveness for all or a portion of the loan. As the first round of PPP funding has been utilized, a new funding package has been approved for the PPP for $480 billion, which appropriated an additional $320 billion for the PPP. The new funding package, passed on April 24, 2020, also includes $60 billion for the Disaster Loans Program and Emergency EIDL Grants.
- Small Business Debt Relief Program
This program will provide non-disaster Small Business Administration (SBA) loans, specifically 7(a), 504 and microloans not made under the PPP. Under this program, all payments on these SBA loans, including principal, interest and fees, are covered by SBA for six months.
- Economic Injury Disaster Loans & Emergency Economic Injury Grants
The program provides loans up to $2 million and emergency advances up to $10,000 that are not required to be repaid.