“When I offered my first seminar on how small businesses could cope with the crisis, Zoom was overwhelmed with 3,000 requests to participate,” he says. “I had been up all night preparing and I needed a shot of scotch to bolster me,” he adds with a laugh.
The Philadelphia-based business loan advisor found himself working almost around the clock to counsel and calm panicked owners because of his reputation for objectively assessing the best sources for help. The intensity of being of service to this tidal wave of need gave him a personal wake-up call all entrepreneurs need to heed.
“It’s easy to feel you have to always be working to deal with demand, which causes you to neglect yourself,” he says. “In July, my heart was fluttering and I went to the doctor to find out what was going on. The initial test seemed to indicate that I had had a silent heart attack, which turned out to be a false positive. But it scared me enough to start taking better care of my health and I used the Noom app to lose 22 pounds. It has changed my life.”
His most important advice to entrepreneurs in crisis: do everything you can to get a good night’s sleep because unless you do, you won’t have the clear thinking to make good decisions or the energy to do everything you should.
The good news is that there are many options for creative financing available.
“When emergency aid is offered, get educated about it, then be aggressive in applying, and ask for guidance if you need it,” he explains. “A lot of those who lost out before waited too long. You can go to small business development centers near you or find a member of the Service Core of Retired Executives.”
He says government officials need to think of aid in two ways. The most obvious is for companies that are still struggling and need help just to survive. The world will likely continue to see seismic shifts in everything from sourcing and working remotely to manufacturing and marketing.
“Others have opportunities to triple down and expand, but they need liquidity and often don’t understand the resources that are available or know an honest broker to help them decide how to manage that growth,” Kassar says. “Every company should have a line of credit because you don’t pay anything unless you use it, but if you have it available it gives you an opportunity to act when, say, you find an extraordinary offer for merchandise or a crisis hits.”
Business owners should approach their banker about a business credit line. Owners with receivables or inventory could also be eligible for an asset-based line of credit. However, he adds, be aware that bankers may not have the knowledge or the incentives to provide the best advice. He also says to beware of offers from online lenders because they need to be repaid quickly.
A lot of attention has been put on emergency loans from the Small Business Administration, which are issued directly from the government, not banks. But Kassar notes that regular SBA loans are much easier to get for those $350,000 or less and have the historical cash flow to support payment. These are issued by lenders, but backed by the SBA, amortized over 10 years with an interest rate of six percent. The flagship 7(a) program comes with counseling and education if desired.
“Few business owners understand how the SBA works and it’s one of the most misunderstood tools for getting help, so we spend a lot of time explaining how to utilize it. SBA loans are still available from banks.” — Ami Kassar
Kassar says that business owners should also look at the SBA to refinance existing debt and improve cash flow. Others may want to make do with less, deferring capital expenditures and reaching out to landlords, vendors, and contract holders to delay payments. Employees could be furloughed or be willing to take pay cuts, as long as the owner’s compensation also takes the hit.
Kassar is a firm believer that the only way to get through the pandemic is to work with government and scientists to find a path that will stop the virus from spreading as soon as possible and not wait for vaccination to be fully accepted.
“We are in a war with an invader and if we were being bombed, would we come out of the shelter before it was over? We need to be leaders and role models and have the courage to win this.”
Kassar, the author of The Growth Dilemma and a weekly contributor to Inc. , says that owners who have the best chance of thriving in the new normal next year “are active in the community, authentic in their communications, transparent with customers, take care of their workforce as best they can, and demonstrate high levels character.”
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