Ways for Business to Endure the Pandemic

The Coronavirus outbreak has had major impact, and for many companies revenues have fallen off a cliff. Further, the uncertainty and likely disruption caused by pandemic will continue for the foreseeable future.

Recession - Recovery

To weather the Coronavirus storm, companies should consider the following:

Conserve Cash

With seriously reduced revenues, companies need to find ways to conserve cash. This includes analyzing essential spending; idling operations; working with vendors, landlords, and suppliers regarding credit terms; and applying other methods. To maximize their liquidity position, companies must prioritize their use of cash.

Companies should consider the relative costs and revenues of idling operations temporarily until business  activity normalizes. Companies will have to burn some cash to idle operations, but the cash may be less than that incurred in keeping a facility open with a skeletal staff.

Good relations with its trade creditors might enable a company to establish a standstill on “old” payables until companies can restart or normalize operations. In the event companies require some goods or services on a limited or one-off basis, arrangements may be made for C.O.D. or to source those needs with an alternative vendor.

Companies may have similar negotiations with landlords, and they should also review leases and contracts for applicability provisions or legal rights/excuses regarding performance. Until these landlord and contract issues are resolved, companies should consider deferring rent and contract payments at this time, especially where they are not receiving benefits or services provided under such leases and contracts.

Lack of liquidity reduces the range of options for financially stressed organizations. With the indeterminate length of Coronavirus disruption, cash provides additional time.  That time really may be necessary for survival until the company normalizes and opportunities return. The federal government has passed stimulus and bailout laws and allocated funds that may assist. However, these stimulus dollars are not expected to make companies whole for their losses due to the crisis.

Communicate with Lenders

Companies should have a conversation with their lenders. If there is availability on lines of credit, discussions should include draw-downs to bolster liquidity. In addition, discussions may include interest payment deferrals, amendments, extensions, restructurings, and borrowing availability increases or additional loans.

If the lender indicates willingness to support the continuation of the business in these uncertain times, the company needs to be transparent and candid, and provide information and analyses of the various possible scenarios to establish credibility with the lender.

The growing levels of stress may make lenders more receptive to alternative options to maintain a going concern until the business normalizes. Lenders have incentive to work with companies to help preserve them.

Update Cash Flow Forecasts

Forecasts need to reflect the current economic environment, projected to account for reasonable upside and downside scenarios for the impact of the pandemic on operations—even including a potential second outbreak of COVID-19. These forecasts may be shared with lenders, depending on circumstances.

Understandably, the current economic landscape may make forecasting difficult, as the severity and duration of disruption in businesses remains uncertain. Further, depending on the business and its location(s), normalization of business operations may take additional time. Accordingly, for many businesses, ramp-up may extend over a period of time, and they may face further disruption from changing customer preferences or a second virus outbreak. Cash flow forecasts, however, must account for these uncertainties.

Companies should review their fixed and variable costs carefully and determine what costs are needed to run the business. Capital investment plans likely need to be revised and delayed. Companies need to assess their deferred expenses and make assumptions regarding the cost to ramp back up operations.

A 90-day cash flow analysis can highlight some of the critical decisions needed. The 13-week cash flow should be updated weekly and provide comparisons of actual against budget, making available detailed information in advance of the typical monthly financial close process.

In going through this deep-dive process, companies may evaluate their core businesses, capital structure, supply chains, rent obligations, vendors, etc., and assess whether substantive changes are necessary or advisable.

Discussions with Stakeholders

Companies should open communications with vendors, landlords and other interested parties to assure them that they recognize the challenges presented by the Coronavirus and have plans to address them.

In times of crises, communication with stakeholders remains vital. The stakeholders have their own concerns regarding the ultimate impact of Coronavirus on their businesses and investments. Open discussions regarding the issues and challenges presented by this crisis establish goodwill and demonstrate a company’s intention to work with its stakeholders. These discussions do not need to express definitive solutions to the challenges, but are intended to reassure stakeholders that the company recognizes the scope and severity of the issues and is contemplating various responses, depending how facts and circumstances firm up.

Review Labor Issues

Labor constitutes a significant operating expense for most firms. Companies need to focus on whether to furlough or terminate employees. Many businesses will likely have assessed these costs and benefits and made decisions; however, companies may need to reassess their decisions from time to time.

Evaluate Insurance

Companies should review insurance policies to determine possible coverage and comply with all applicable notice requirements.

Although the most obvious source, most business interruption and extra expense insurance usually requires some sort of physical injury or damage to other business property as a trigger to coverage. Such coverage typically is designed to apply where a physical event (e.g., a building fire) shuts down operations for a period of time. It is unclear whether a claim premised on the physical illness of people necessary for business operations and government-ordered closures would be accepted. This issue should be examined on a policy by policy basis.


In summary, businesses must take steps now to mitigate and address the impact of the Coronavirus. These steps include a number of tools and analyses which can and should be used by businesses to survive the current crisis.


Be sure to speak with your legal and tax professionals regarding the specifics on any CARES question and any potential legal tax issues facing your business.  Flexicrew provides this information as a public service, but it should not be construed as either legal or tax advice.

Flexicrew can assist you with workforce planning and recruiting the quality talent that you need in this recession upheaval.  Contact one of our workforce professionals Today!

DOL Issues FAQs About Face Coverings – Surgical Masks – Respirators in the Workplace

WASHINGTON, DC – The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has published a series of frequently asked questions and answers regarding the use of masks in the workplace.

Dept of Labor logo“As our economy reopens for business, millions of Americans will be wearing masks in their workplace for the first time,” said Principal Deputy Assistant Secretary for Occupational Safety and Health Loren Sweatt. “OSHA is ready to help workers and employers understand how to properly use masks so they can stay safe and healthy in the workplace.”

Face Coverings and Respirators

The new guidance outlines the differences between cloth face coverings, surgical masks and respirators. It further reminds employers not to use surgical masks or cloth face coverings when respirators are needed. In addition, the guidance notes the need for social distancing measures, even when workers are wearing cloth face coverings, and recommends following the Centers for Disease Control and Prevention’s guidance on washing face coverings.

Latest OSHA Guidance

These frequently asked questions and answers mark the latest guidance from OSHA addressing protective measures for workplaces during the coronavirus pandemic. Previously, OSHA published numerous guidance documents for workers and employers, available at https://www.osha.gov/SLTC/covid-19/, including five guidance documents aimed at expanding the availability of respirators.

Further Information

For further information and resources about the coronavirus disease, please visit OSHA’s coronavirus webpage.


Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA’s role is to help ensure these conditions for America’s working men and women by setting and enforcing standards, and providing training, education and assistance. For more information, visit www.osha.gov.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

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Media Contact:  Megan Sweeney, 202-693-4681, sweeney.megan.p@dol.gov


What the $2 Trillion CARES Act Means for Small Business Owners

Paycheck Protection Program

As of April 16, small business relief funds offered through the Paycheck Protection Program (PPP) had been depleted.

On April 27, PPP officially reopened at 10:30am EDT. The program was refunded with another $310 billion available to small business owners. If you haven’t already, contact your bank or preferred lender! If you need more help and clarification on what PPP is, if you qualify and how to ensure your loan is forgiven, keep reading…

The $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on Friday, March 27.

The legislation includes a number of business-boosting relief programs, the largest of which is the Small Business Association’s (SBA) Paycheck Protection Program or PPP.

As of Wednesday night (April 15), the SBA is reporting that 1,562,000 PPP applications have been approved, totaling over $329 billion.

The good news is that loan applications have officially been approved by the SBA, and money should be in the accounts of more than 1.5 million small business owners shortly.

One PPP loan tracker puts the total estimated loan disbursement figure at $16.4 billion as of Wednesday night.

If you’d like more on these loans and other relief available through the $2 trillion CARES Act, continue reading…

The text of the bill can be read on the official Congress website right now.

Affect On Small Businesses

Here’s  how this will affect small businesses.

So far, reporting on the bill indicates that it includes:

  • $349 billion for small business loans
  • $50 billion for companies who retain employees on payroll to cover 50% of workers’ paychecks
  • SSA payroll tax deferment (6.2%) for companies
  • $500 billion in loans for larger distressed companies
  • $130 billion for hospital funding
  • $150 billion for state and local governments

The CARES Act primarily provides relief to small business owners through SBA loans.

Need Assistance Hiring Temporary Workers

If you need some assistance in recruiting and hiring workers in this uncertain labor market, contact Flexicrew today.