Author: officespace

Small businesses need a financial safety net now more than maybe ever. As large swaths of the US economy remain closed, small business owners across America have had to shutter their businesses. These closures—or transitions to online-only or takeout business—-have put a strain on many small businesses’ working capital. 

So what can small businesses do? Thanks to swift work from the US government, small businesses can apply for financing through the SBA. Paycheck Protection Program (PPP) loans and Economic Injury and Disaster Loans (EIDLs) provide low-interest loans for impacted small businesses, but they’re not the only option. 

Lenders are still funding small business loans, and the products borrowers are most likely to qualify for right now are also the loans that provide the fastest funding and most flexibility. 

Paycheck Protection Program (PPP) Loans

If you’ve heard talk of one coronavirus financing option, it’s probably PPP loans. Created under the CARES Act, PPP loans are low-interest, potentially forgivable loans. Designed to help small businesses keep employees on their payroll, the maximum loan amount for each business is 2.5 times its average monthly payroll cost. That number includes items like wages, as well as paid vacation days, separation or dismissal allowances, and group healthcare costs. 

Funds used for approved purposes, which are all payroll related, over the course of the first 8 weeks of the loan (starting at the date of funding) are eligible for forgiveness. To have your PPP loan forgiven, you’ll have to provide documentation to prove that the funds were used for allowed purposes and apply with your lender. We don’t know the full extent of what the forgiveness process will look like because PPP loans have only just started funding and no borrower has yet reached the point where they can apply for loan forgiveness. 

Economic Injury and Disaster Loans (EIDLs)

EIDLs previously existed as a form of disaster financing through the SBA before coronavirus. Small businesses in designated disaster areas are eligible to apply, and the good and bad news is that all US states and territories qualify as a result of coronavirus. To qualify for the loan, small businesses need to prove that they’ve suffered “serious economic injury” as a result of coronavirus. Borrowers should be prepared for more documentation and a longer time until funding—approximately 60 to 90 days. 

To apply for an EIDL, you must apply through the SBA’s website. The application takes an estimated 2 hours and 10 minutes to complete. 

Emergency Economic Injury Grant (EEIG) 

60 to 90 days is a long time to wait for an EIDL, and on top of that, the SBA had trouble with elements of the rollout. To make it up to small businesses, the government agency has offered Emergency Economic Injury Grants (EEIGs). 

To be considered for an EEIG, your small business must complete the EIDL application. On the fourth page of the EIDL application, you can click a box that says “I would like to be considered for a loan advance of up to $10,000.” Click it. That’s all you have to do to apply for an EEIG. 

While the SBA uses the language “loan advance” on their EIDL page, it is a loan advance that doesn’t have to be repaid. Confusing? Yes. But essentially, the “loan advance” is used interchangeably with EEIG. If your business applies for an EIDL, you should ask to be considered for an EEIG to potentially receive up to $10,000. Importantly, the SBA also notes that you don’t need to qualify for an EIDL to receive an EEIG. 

Business Line of Credit

Ultimate flexibility for when you need it the most, a business line of credit allows small businesses to borrow against a predetermined sum. You can borrow as much as you need, repay it, and repeat as many times as you need or want to over the course of the loan term. 

A business line of credit is an ace form of financing in the time of coronavirus because it provides a financial safety net without the same obligations of a standard business loan. 

Accounts Receivable Financing

Are you waiting on unpaid invoices? Accounts receivable financing, also referred to as factoring, might be the solution for your business. This loan type allows you to leverage the money you are owed for working capital today. 

Short Term Loan

A short term loan is designed for when you need quick access to capital that you can also repay quickly. Short term loans are often funded in as little as 24 hours and can be an essential lifeline for small businesses that need fast cash. Short term loans are designed to be repaid quickly, so this loan is best used for when you have a clear sense of how you can repay the loan quickly to avoid rising costs associated with longer repayment terms for short term loans. 

ACH Loans

An ACH loan, often referred to as a “cash flow loan,” is another quick financing option, and it comes with looser requirements. ACH loans are based on a borrower’s daily bank balances rather than on credit score, making the loan type accessible to a broader swath of borrowers. Loan repayments are automatically deducted directly from your checking account, so you won’t have to worry about scheduling reminders for payments.

With very few exceptions, running a successful business means having employees. Employees are the backbone of any business, no matter the industry and no matter the size. Once you’ve gone to the trouble of finding the right employees for your business, how do you keep them?

1. Ask

How do you know what your employees need in order to keep them showing up every day, ready to work? There’s one very simple way to find out—ask them.

Foster an attitude of open communication between you and your employees. If you have managers, make sure that they are encouraging communication with those they supervise. Conduct “stay” interviews with employees, and find out the things that keep your employees coming back every day. Ask things like, Why do you like working here? What can we improve for you? Both new and established employees can help you pinpoint problems. 

If you’re worried about not getting truthful answers or employees telling you what they think you want to hear, ask them to fill out an anonymous survey, which allows them to share their suggestions without fear of repercussions. 

2. Listen

The second part of asking your employees for feedback is to show that you’ve heard them. Take action to prove that you’ve heard and understood the challenges facing your employees. According to the Wrike Employee Engagement Survey, only 59% of the 5000+ survey participants said their company conducted regular engagement surveys. Of that 59%, only half felt that their company acted on employee feedback. 

Did your employees ask for more flexible work schedules? See if there are ways to allow employees to work from home. Are your hourly employees struggling to juggle their schedules? Work to keep their hours more consistent.

Is there a manager who is hurting your employees’ ability to do their best work? Have a difficult conversation, and find ways to solve the problem. Are there repetitive tasks in your employees’ days that could be automated? Are they struggling to work with outdated software or tools? Time spent struggling with outdated tools is time that isn’t being spent building your business. 

3. Recognize

Find ways to recognize the hard work of your employees. Take time during staff meetings to recognize successes both big and small on your team. If you don’t already, train yourself and your managers to verbally thank and congratulate employees for the success of the company.

Don’t forget the power of peer-to-peer recognition. For example, JetBlue has implemented a peer-recognition program allowing employees to nominate one another for either everyday excellence or for an extraordinary case of going above and beyond. Nominated employees receive recognition in an internal newsfeed and earn credits that can be redeemed for rewards of their choice ranging from dinner to cruises. While that program may be beyond the reach of most small businesses, the idea of peer nomination, internal recognition, and employee-chosen rewards is not. 

4. Develop

If you want employees to invest in your company, lead by example and invest in them first. Promote from within whenever possible. At the very least, offer employees the chance at advancement before turning to outside sources. Take a look at who you promote and why—imagine you are accountable to someone outside your business and make sure you can justify your decision. 

Prove to your employees that you see their hard work and are willing to invest in their long-term growth by offering career development opportunities. Whether you hold these in-house, pay for an employee to attend a conference in your industry, or offer tuition help for those pursuing a degree, showing that your business is invested financially fosters employee loyalty and retention. 

5. Celebrate

Look at any calendar—you’ll notice that almost every month has a reason to celebrate. It’s human nature to look for reasons to celebrate, and the business world is no different. Find ways to celebrate both big and small milestones. Celebrate anniversaries, birthdays, making it to the end of a hard week, the first day of spring, Earth Day, the leaves changing in the fall, landing a new account. Whatever the reason to celebrate, include every employee possible and lead by example.

Celebrations give employees something to look forward to, whether it is a company-wide celebration or an individual accomplishment. Anniversaries are a perfect time to celebrate the loyalty of your employees, so mark the occasion in a way that fits your business’s personality and budget. A gift card to a local coffee shop or restaurant, a bottle of wine, or an additional paid day off are low-cost ways to celebrate your employees. Even if it’s just a hand-written card, a little appreciation can go a long way.

The modern workplace is constantly evolving, and unforeseen circumstances can perpetuate change faster. 

For example, many organizations were already using messaging and video apps like Slack and Zoom before the COVID-19 pandemic, and now that most businesses are working remotely, the adoption of these virtual communication tools is growing exponentially.  

Even before the coronavirus outbreak, companies were embracing flexible work schedules with remote opportunities as part of a larger employee-centric movement. Businesses were prioritizing employee satisfaction and company culture to mitigate turnover and increase productivity.

While there’s no way to predict what will happen in the coming months, here’s a closer look at 5 trends taking off in the workplace and how they’ll impact businesses in 2020.

More Companies Will Offer Flexible Work Schedules

No employee is the same—we all have personal priorities and preferences. Maybe you’re an early bird who enjoys working before the sun rises, or maybe you focus best in the evening after you put the kids to bed.

Employees have their own schedules, and it’s unrealistic to expect everyone to conform their lives to the traditional, outdated 9-to-5 mentality. In fact, many studies have concluded that the average person is only productive for three hours of an eight-hour workday. 

The desire for flexibility has reached management’s ears, with many companies offering flexible work schedules to their team members. While businesses might not be ready to embrace the drastic four-hour workweek movement, they are offering flex-schedules.

With flexible schedules, employees can dictate their workdays around their lives or preferences, as long as they meet their hourly or quota requirements. This approach could include working four 10-hour days and taking Friday off, working from home on Monday and Friday, or any other combination of hours and days.

If you decide to offer flex-schedules within your company, consider setting up an infrastructure for your team members. Ask employees to stick to the schedule of their choice—that way, employees can coordinate their communications accordingly. 

Companies Will Invest in Employee Well-Being

In recent years, businesses were moving into dangerous territories as technology made it possible for companies to push the boundaries between work and personal. 

Side-hustling, digital entrepreneurship, and the “startup lifestyle” were glorifying employee burnout. Employees were encouraged to check and respond to work emails while off the clock. Managers expected staff to work late into the night, even at home, to complete deadlines. 

While there is still pressure in the workplace, more employers are focusing on employee well-being. This shift includes emphasizing work-life balance and considering the environment that teams work in. 

This focus on well-being follows the simple belief that happy, healthy employees are more productive. You make fewer mistakes if you aren’t exhausted. You are willing to take on more if you don’t feel overworked. 

Consider the work-life balance and overall well-being of your team to improve their productivity and increase their loyalty to your organization. 

Human Resource Managers Will Focus on Hiring Equity

Human resource teams are working to eliminate bias in hiring—particularly when it comes to unconscious bias. Names, universities, graduation years, and experience can all contribute to bias, even on a subtle level.

This bias means that resumes get ignored, and certain candidates have a harder time landing interviews. To make the workplace more diverse, companies are moving toward blind hiring. 

This process includes looking at the experience without the name or sending out skills tests to find the most qualified candidates. While it can’t remove all prejudice, it’s a positive step toward creating a more equal hiring environment.

Consider updating your hiring process to eliminate bias and increase your qualified candidate pool. 

Companies Will Train and Promote Internal Talent

Upskilling will be a significant trend in 2020 as companies work to identify valuable workers and improve their knowledge of the industry. Upskilling involves training and mentoring. 

In short, it is investing in team members. By upskilling your workforce, you can improve employee loyalty. Your team members are less likely to quit if you invest in their potential and if they see growth opportunities within your organization.

Upskilling also allows you to mitigate knowledge gaps within and across departments. This additional training will make your company more resilient and flexible—allowing it to adapt and survive when it faces challenges like we are currently.

Automation Will Increase Efficiencies

Automation is nothing new for businesses, and it’s a trend that will continue well beyond 2020. Most businesses are aware of the value of automation—with many seeking automated solutions to mundane and repetitive tasks. 

Instead of downloading and uploading reports, businesses are using APIs to connect datasets. Rather than hiring dedicated customer service representatives, companies are automating their help desks with FAQs and chatbots. 

As you might imagine, automation can make your business more efficient, but it can also leave your employees feeling obsolete. A recent study from Forrester suggests that more than 1 million knowledge-work jobs will be replaced by robotics, machine learning, or other automated technologies this year.

While certain jobs might be lost because of new technology, it will create new, strategic-level positions. Automation shouldn’t be viewed negatively by employees—it should be a tool that helps mitigate their time spent on redundant tasks so they can focus their energy on more complex problems.

Keep Your Business Moving Forward This Year

Progressive organizations will monitor business trends and make strategic decisions to increase productivity and success. Within our current economic landscape, it’s never been more important to have a pulse on the global workforce. 

As you can see above, several business trends currently affect how organizations operate. While no one can predict the future, you can take heed of these insights and modify your organization as needed to keep your employees happy, your company culture positive, and your business moving forward.

Technology has made it exponentially easier to connect and communicate online. People can video call, send emails, share documents, and manage tasks anywhere they have an internet connection. 

This flexibility has led many employees to request working from home—but organizations are less excited about this laissez-faire approach. 

How can you know your employees are actually working all day? Will the quality of work suffer without regular face-to-face interaction? It’s much easier for businesses to monitor employees and hold them accountable in the office—can they really trust employees to work from home?

In the wake of the COVID-19 pandemic, businesses no longer have the luxury of testing remote work—employees around the globe are being forced to work from home. So ready or not, we are going to stress-test remote work globally.

As we come out on the other side of the coronavirus outbreak, you’re going to know a lot more about how effective working remotely is for your business. With that in mind, let’s take a quick look at remote work and whether it’s something you should consider long-term.

Employees Already Waste Time at Work

Companies that try to limit remote work often want to cut down on employee distractions. If an employee is in the office, then management can walk by and make sure they aren’t wasting time or doing non-work-related tasks. However, managers might not be as good as they think at catching employees. 

Employees admit that they waste three hours on average during an eight-hour workday. This time is spent surfing the web, socializing with coworkers, and generally spacing out. Furthermore, 77% of employees with a Facebook account say they use it at work.

Your employees will find a way to waste time at work—they just won’t do it in front of you. 

Remote Work Doesn’t Mean Lower Productivity

When you look at the productivity numbers, remote workers are statistically more productive. A 2019 study of more than 1,000 employees found that remote workers work an average of 1.4 more days every month than their in-office counterparts. 

Remote workers only reported being idle for 27 minutes each day (outside of lunch and breaks) compared to 37 minutes for in-office staff.  

This evidence suggests that if your employees are happy to work for your company and value their jobs, they will work just as hard remotely as they would in a face-to-face setting. If they aren’t engaged in their jobs, then it doesn’t matter where they work—these team members won’t give it their all.  

Remote Work Has Multiple Human Resource Benefits

While most managers focus on productivity when they consider letting employees work remotely, there are other benefits to consider. For example, remote workers save an average of $4,500 on fuel each year and clock an extra 25 minutes of physical exercise each week. These benefits mean that remote work options can serve as a cash bonus for your team members while making them healthier and happier. 

Along with helping employees, the benefits that come from remote work can also help employers. For example:

• -Happier employees are less likely to quit, reducing turnover and lost profits because of it. 
• -More employees will apply to a job that offers remote work options, increasing your talent pool so you find qualified candidates. 
• -Hiring workers for full-time remote positions allows you to increase your talent pool across the country, helping you find the perfect fit for your brand. 

Ask yourself: is a reliable employee working from home better than a handful of average employees in the office? Most would probably say yes. 

You Don’t Have to Approve Full-Time Remote Work 

One of the biggest misconceptions that employers have is that their remote workers are never in the office. In fact, 60% of workers actually prefer being able to work in the office and don’t believe that having flexible work options would interfere or disconnect them from their office. Despite the majority preferring to work onsite, more than 80% of workers still like the idea of being given the option to work remotely – even if it’s on occasion. 

In fact, when employees are able to work from home at least once a month, they are 24% more likely to be happy and productive. In other words, giving employees the flexible work options, even on occasion, plays a factor in their well-being and overall productivity. 

Consider the needs of your employees and why they want to work from home. This information can guide your remote work policy. A few examples include:

• -Letting employees work remotely on Fridays as a perk of the job. 
• -Allowing parents to work remotely in the afternoon once they pick the kids up from school. 
• -Permitting employees to work remotely to greet repairmen or other home service providers. 
• -Letting employees work overtime remotely over a weekend to complete a project on a tight deadline. 

Even if you do let employees work remotely whenever they want, you can still ask them to come to the office for certain meetings or on specific days to meet with clients. This approach creates a fair amount of remote and office time. 

Furthermore, setting up remote work policies when everything is fine can prepare your company in the event that your team members need to stay home during a natural disaster or emergency—as we’re seeing now. 

The Future of Remote Work

Organizations around the world are being forced to work remotely—even if they were ill-prepared. As a result, businesses will have growing pains and hurdles to overcome with working from home. However, there’s no denying that there will be lessons learned. 

Will we discover the remote office to be the next frontier of the workplace? Will working from home prove to be a complete failure? 

Likely, we’re going to land somewhere in the middle. Remote work will have its flaws, but it will also have benefits for the employees and employers. Once we get back to business as usual, companies should evaluate their experiences and consider adapting their businesses for remote work opportunities. 

Remote work isn’t the right choice for every company, but that doesn’t mean you should completely write it off. With the right system, your employees might appreciate the flexibility and reward you with increased productivity.

If you’re a small business owner seeking financing, lenders will consider multiple factors before approving a loan. They’ll be interested in your tenure, experience, and industry—among other things. Nearly all of these factors can be boiled down to one crucial question: How likely are you to repay the money you borrow?

While there are no simple answers to this question, your business credit score is a user-friendly number that gives them a quick idea of your reliability. This score accounts for your business debt usage, personal debt usage, business debt coverage, personal debt coverage, business revenue trend, and personal credit.

“Just as the bank reviews your personal credit score and credit history when you apply for a car loan or mortgage, creditors review your business credit score and history when your business applies for a credit product,” explains credit expert Kimberly Rotter. “Your business score tells them how much of a credit risk your business poses based on past financial behavior.”

Given the importance of your score, it’s important to know how to build and sustain it. Inaction is always an option, but this is a situation where you ignore your meal ticket at your peril.

How Do I Find Out Where My Score Stands?

Lenders can access a handful of business credit score sources while considering your application. They include:

• Experian
• Equifax
• FICO
• Dun & Bradstreet

While you may be unfamiliar with these credit reporting agencies, that doesn’t mean you should let them manage your credit in the shadows. It’s always wise to take a proactive approach and regularly monitor your score.

There are plenty of ways to check your score with a fee, but here are 5 ways you can get an update at no cost:

Nav: This convenient service lets you check both your personal and business credit history. Nav can access the reports from Experian and Dun & Bradstreet, giving you a rounded view of your finances. As a bonus, Nav provides resources like a goal-setting tool to help you stay on an upward trajectory.

CreditSignal: Although this service only gives you access to your Dun & Bradstreet report, it offers a wide range of perks that make it a great option. One of the best things about it is that you can sign up to get alerts anytime your score experiences changes.

Credit.net: This more upgraded option includes a week-long trial that’ll provide free credit reports, but then you’ll be prompted to pay for the services if you wish to continue. A key advantage of the Credit.net paid packages is that they connect you with an expert who can alert you of issues and provide strategies for boosting your score.

CreditSafe.com: Here’s another try-before-you-buy option. You’ll get free access to your credit report, as well as CreditSafe’s suite of monitoring tools. The website’s dashboard is loaded with resources to educate you on best practices for managing your credit.

Apply for a small business loan: This approach is the most indirect method of checking your business credit score, as it’s merely a final step that many people neglect in the loan application process. If your loan application has been rejected, you’ll receive correspondence directly from the credit bureau that the lender used to verify your credit. You can respond to this letter within 90 days to receive a free business credit report.

What If My Score Isn’t What It Needs to Be?

Entrepreneurship is a volatile pursuit, so it’s common for small business owners to have blemishes on their financial track records. There are also track record issues for new businesses, as they haven’t had an opportunity to amass the data points necessary for a solid score.

In these scenarios, your personal credit score takes an oversized role. As mentioned above, it’s already 1 of the factors included in your business credit score. So whenever a business credit score is inadequate, your personal credit score can be used by lenders as they make their decisions.

The good news is that there are small business financing products that are particularly relevant for borrowers who lack a convincing business credit score. Due to their unique structures, lenders can look at other factors as they make their approval decisions, such as:

Business line of credit: This versatile type of financing provides revolving credit for a variety of business-related expenses.

ACH loan: Instead of focusing on credit scores, lenders base ACH loan decisions largely on the performance of your business.

Merchant cash advance: Your future earnings take center stage with a merchant cash advance, making your financial history less relevant.

Any of these 3 financing options can be helpful in the short term, but you’ll still want to focus on building your business credit score and getting access to a wider array of financing in the future.

While there are many strategies you can use to improve your business credit score, the most important element is awareness. Many entrepreneurs never check their scores, essentially throwing their hands in the air and saying whatever happens will happen.

This strategy is problematic because you’ll never know which aspects of your finances you should focus on improving without the insights available in your credit report. Additionally, up to 20% of credit reports contain errors. Your report may fall into this camp, so be sure to monitor your credit carefully.

If you find errors with any of the major bureaus, you need to take prompt action to get them corrected. You can follow the directions contained at the bottom of all credit reports regarding how to dispute incomplete or inaccurate information. You can also review this resource from the Consumer Financial Protection Bureau for additional information.

As you take an active role in your business credit, you’ll become a more powerful advocate for your small business. Building credit is a long and dynamic process, but every step forward, no matter how small, yields positive results for your business.