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What Do You Do When PPP Funds Are Exhausted?

By Theodore Tzafaroglou, Principal



This is a question many business owners are facing this very moment. PPP funds were in many cases effective bridge loans to get to the other side of the initial COVID-19 shutdown. As businesses reopen throughout the economy, operators are challenged to find funding through the ramp up. Those who succeed will have many of the following characteristics and may reduce some of the working capital requirements related to operating in the COVID-19 environment:


Updated business model 

  • Reduced products and services can reduce inventory and funding requirements.

  • Reduced hours can lower operating costs and help staff the business when employees may not be willing or able to return to work.

  • Increased prices for customers and pay for team members may be necessary.

Restructured management team

  • Focus on the safety of team members and customers like never before.

  • Evaluate your team roster for the next level of talent. This is an excellent opportunity to move team members up to increased responsibilities in the company. They will work diligently to succeed.

Reconfigured, repurposed and/or repackaged products and services

  • Produce smaller batches to make as many customers happy as possible.

  • Create new offerings, where practical, to use up existing inventory without a need to replenish.

You should also research the availability of unconventional funding sources, such as state, regional and local government grants earmarked by the CARES Act. There may be some assistance available, especially for small businesses.


Now more than ever, it‘s essential to prepare detailed cash flow forecasts to identify working capital requirements under different scenarios. Stakeholders are going to need this information as they work to evaluate the financial position of the business. 


NECP can help. Our experienced professionals and proprietary methodology can support your business through these challenging times like no one else. 


Call us to gain some clarity on how to move forward:

Tom Desmond, 617-480-8146

tdesmond@neconsultingpartners.com


Ted Tzafaroglou, 734-377-1053

ttzafa@neconsultingpartners.com

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