The Main Street Lending Program
There is no doubt that the COVID-19 situation seems to change with each and every day. The disruption and chaos that the pandemic has injected into both daily life and business is obvious. Just as it is often difficult to keep track of the ebbs and flows of the pandemic, the same can be stated for keeping up to speed on the government’s response and what options exist to assist companies of all sizes.
In this article, we’ll turn our attention to an overlooked area of the government’s pandemic response and how businesses can use a whole new lending platform to navigate the choppy waters.
As the pandemic continues, you will want to be aware of the main street lending program, which is a whole new lending platform. It was designed for businesses that were financially sound prior to the pandemic. Authorized under the CARE Act, the main street lending program is quite attractive for an array of reasons. Let’s take a closer look at what makes this program almost too good to be true.
This lender delivered program is a commercial loan. Unlike the PPP, there is no forgivable component. However, the main street lending program does have one remarkable feature that will certainly grab the attention of all kinds of businesses. It can be used to refinance existing debt at a rate of around 3%. With that stated, it is also important to note that businesses cannot refinance existing debt with the current lender. Instead, a new lender must be found. Generally, loans are a minimum of a quarter million dollars and have a five-year term. In another piece of good news, there is a two-year payment deferment period.
The main street lending program can be used in a variety of ways. In short, the program is not simply for refinancing existing debt. Additionally, there is no penalty for prepayment. The way the program works is that lenders make the loans and then sell 95% of the loan value to the Fed. This of course means that the lender is only required to retain 5% of the loan on their balance sheet. The end result is that lenders can dramatically expand the amount of loans they can make.
Whether it is the PPP or a program like the main street lending program, there are solid options available to help you. Businesses looking to restructure debt or put an infusion of cash to good use may find that the main street lending program offers a very flexible loan with great interest rates.
Copyright: Business Brokerage Press, Inc.
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Improving Your Telework Habits
In her recent April 20th, 2020 Forbes article, “Three Keys to Engaged, Productive Telework Teams,” author Rajshree Agarwal, who is a professor of Strategy and Entrepreneurship, explored how to get the most out of telework. This highly timely article covers some very important territory for many companies dealing with the COVID-19 pandemic. Let’s explore Agarwal’s key points so that you can help your team get the most out of telework.
Agarwal notes that people may tend to shy away from sharing personal information and feelings while in the office. But via video conferencing, the story can be different. For this and other reasons, it is necessary for employers to keep in mind that the dynamic between you and your employees may be different when you use video conferencing. This will also often be the case when your employees speak with one another.
She prudently cautions business owners from taking a “business-as-usual” approach to the COVID-19 situation, as it can make them look both unnecessarily cold and out of touch with reality. On the flip side, however, it is also important to not dwell on the negative aspects of the pandemic. Offering some sense of normalcy during the COVID-19 pandemic is a smart move as well.
How you use telework and video conferencing is, in part, about developing the correct balance. On one hand, you’ll want to acknowledge that the situation is serious and must be addressed. But on the other hand, you don’t want to dwell on the pandemic. After all, not effectively handling the work at hand could undermine your business and cause other problems for both you and your employees.
It is in everyone’s best interest to be smart, safe, and acknowledge the bizarreness of the current situation while striving to achieve business goals. The keyword here is “balance.” Agarwal states that “The combination of empathy and purpose unifies individuals, allowing team members to channel their efforts towards shared objectives and values. This is the best antidote for anxiety.”
From Agarwal’s perspective, there are three keys to making telework effective: communication, socialization, and flexibility. First, there has to be good communication. For example, people can’t simply ignore one another’s emails because they are working virtually. She points out that real-time meetings via Zoom or Skype can eliminate some communication issues, but not all.
The second factor to consider is socialization. As Agarwal points out “Engaged, productive teams also take time to socialize.” Working from home alters the typical modes and methods of socialization, but virtual interactions can be used to help people form and develop their social networks.
In short, socialization doesn’t have to end once telework begins. Used judiciously, socializing, and the bonds it creates between co-workers can still continue.
Agarwal’s third key is flexibility. Flexibility is critical, as all team members must adjust to what, for some, may be a fairly radical restructuring of their day-to-day work experience. Those who haven’t worked virtually before may find adjusting to be quite a challenge. Management should strive to be more flexible during telework caused by the COVID-19 pandemic. Trying to maintain the same top-down approach could prove to be problematic.
It goes without saying that telework presents challenges. However, the challenges it represents are not insurmountable. There are benefits to teleworking, and teams can use it to generate solutions that they might have not reached in the typical work environment.
Copyright: Business Brokerage Press
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Don’t Fear Failure, Learn from It Instead
Failure is rarely fun. But it is also a key ingredient in success. While failure can be painful, there is no doubting the fact that the lessons that come from failure can be powerful teachers that provide life-long lessons and even life-trajectory altering results. Summed up another way, failure hurts. But on occasion, not failing could hurt more, especially in the long run.
In her Inc. article, “Why Tons of Failure Is the Key to Success, According to Seth Godin,” author Sonia Thompson, CEO of Thompson Media Group, points out that most people “avoid failure like the plague.” Instead, they spend their time trying to achieve perfection. In the process of adopting this approach, people miss all kinds of opportunities because they are afraid of damaging their egos. Embracing failure is a way to experience many “transformational benefits,” which would never be experienced without the lessons of failure.
Thompson points to the work of 18-time best-selling author Seth Godin who has written about how entrepreneurs who fail more often perform at a higher level. She quotes Godin as follows, “The rule is simple. The person who fails the most will win. If I fail more than you do, I will win. Because in order to keep failing, you’ve got to be good enough to keep playing.” Godin continues that failure imparts a gift of sorts in that it teaches us how to distinguish between a good idea and a bad idea.
As Thompson notes, research supports the notion that if you want a breakthrough idea, you will need to “produce an enormous volume of ideas.” Obviously, most ideas won’t work, but that isn’t the issue. The issue is to work your way through the bad ideas to get to the winners. Sure, it would be great to have nothing but winners. But life and reality don’t work that way. Failure should be seen more as a path forward than the end of the road.
Getting comfortable with failure, in Thompson’s view, is critically important. She believes entrepreneurs should take steps that make them more comfortable with failure, such as detaching oneself from the results.
It is vital to remember that you are not the work. In contrast, the work is part of an ongoing process. Getting good at something takes time, and there will be failures. For this reason, entrepreneurs simply must embrace a “growth mindset.” Don’t think of failure as failure, but instead as part of a learning process. There is no denying that this approach will make you calmer and that, in turn, may help you make better decisions.
There will be failure in life. There will be problems and there will be obstacles. Much will happen that you can’t predict, manage or control, such as the COVID-19 outbreak. The trick is to focus on what you can control and move forward without a paralyzing fear of failure. Because in the end, failure may be one of your best tools.
Copyright: Business Brokerage Press
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How to Connect During a Crisis
Small business owners are facing new challenges during this crisis. Communicating with customers requires more focus and depth than ever before. In Mat Zuker’s latest article for Forbes Magazine, he cites Jay Mandel who runs The Collective NYC, a marketing consulting team focusing on a customer’s experience, who underlines the importance of businesses to understand their mission statement and values in order to re-enforce marketing strategies.
Information is Crucial. Each customer purveying your business’s website needs to understand your hours of operation, any limitations to service and what is being done to ensure cleanliness. Providing this information establishes to your customer your seriousness of precautions which will be appreciated during this time.
If your financial situation allows, focus on your employees, donate to charities or offer discounted or free products. By marketing this information, your brand’s scope will bolster with the customer as well.
Utilizing the Customer’s Time. Most customers are adhering to social distancing guidelines put forth by their state and the federal government. Now, more than ever, it is important to exhibit to your customers how your brand can be utilized beyond your brick and mortar. Zuker cites how universities are beginning to offer free online classes and telecommunication companies are offering two months of free service to low-income families; King Arthur flour is promoting its library of comfort food recipes (yes, please!). Thinking beyond your storefront to put your service or product into your customer’s virtual hands is important.
Remember to entertain. By each passing day, customers are looking for new stimulation to help the time go by at home. Movie companies are making the best of the situation by sending theatrical releases to online streaming services. We don’t think it is necessary to always make your customers laugh, but it might be within your branding to aim for content geared towards warmth, humanity and empathy.
The metric for engaging your customers is changing; moving beyond views and shares to quality feedback or social impact on your community. Do not bite off more than you can chew. Cited in Zuker’s article, Social Media Today warns of virtue signaling; meaning declaring a set of values, but not following through on the actual deeds.
Also, this is a fantastic opportunity to consider your marketing strategies for when this crisis ends. What will your business look like once you are able to open the doors? How are you able to stay relevant with your competitors? These are all questions needing answers, but today we must do our best to accomplish what is in front of us.
Read Mat Zucker’s full article here: https://www.forbes.com/sites/matzucker/2020/04/01/content-in-a-crisiswhat-brands-can-deliver/
Copyright: Business Brokerage Press, Inc.
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IBBA and M&A Source Market Pulse Survey Report Predicts Major Changes
The IBBA and M&A Source Market Pulse Survey Report for the fourth quarter of 2018 has a range of interesting insights. The survey’s purpose is to provide an “accurate understanding of market conditions for businesses being sold in Main Street (values $0-$2MM) and the Lower Middle Market (values $2MM-$50MM). This national survey was designed as a tool for business owners and their advisors and has the support of both the Pepperdine Private Capital Markets Projects and the Pepperdine Graziadio Business School.
One of the most striking facts to leap out of the report is the fact that a full one-third of advisors fully expect the strong market to end this year. Overall, advisors are not optimistic that the current climate will continue through 2020. In fact, advisors are encouraging sellers to consider placing their businesses on the market now, while the market is still strong. This is according to Craig Everett, PhD and Assistant Professor of Finance and Director of the Pepperdine Private Capital Markets Project.
One fact from the report that could be overlooked is that only a mere 8% of advisors expect the current climate to last for 48 months or more. Additionally, only 9% believe that the current climate will last between 24 to 48 months. Perhaps most striking of all is the fact that 60% of advisors feel that the current climate will end within the next two years.
Business owners who are considering selling should be advised that almost two-thirds of advisors now feel that there will be a significant shift in the next two years. Considering that it can take a year or more to sell a business, business owners would be wise to consider this important fact.
The report sites Neal Isaacs, Owner of VR Business Brokers of the Triangle who states, “Deals are taking longer in due diligence as buyers work hard to validate their investment and make sure that what they’re buying is worth the premium price today’s sellers are commanding.”
So, is now the time to sell? Many experts feel that it is possible to lose a sizable amount of value if one waits too long to sell. Even just a few months can make a huge difference in terms of perceived value and the ultimate sales price. Working with a proven business broker is a key way to ensure that you are selling at the right time and secure the best possible price.