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3 things to do before your agency takes a government loan to survive the Covid-19 crisis

I know many of you with agencies in the U.S. are planning to take advantage of the new government loans that can be forgiven if you retain (or rehire recently laid off) employees for the next few months.

I don’t want to discourage you from doing that, but I do want to encourage you to do 3 things:

  1. Crunch the numbers to make sure that the loan (and its terms) actually work out for you. There’s no such thing as free money.
  2. Don’t let the cash from this program (or other cash reserves and lines of credit) let you delay making the tough decisions that you know are needed to transform your business for the future.
  3. If you do take the cash, leverage it to give you runway to begin an orderly implementation of the new path that you have set for your agency business.

These are tough times, and we don’t have control over many things — but we do have the power to make our own decisions about the steps we will take to begin to recover.

Video Transcript

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Here in the United States, I know that many of you agency owners are looking at using the new paycheck protection program in order to get some money into your agency business and figure out how it is that you can get by for the next few months.

And, look, there’s a lot of damage going on to the economy right now. We’re all in tough positions. And this money can be very useful. It can be very appealing.

But my concern is that there are some agencies that are looking at this and saying, okay, I can take advantage of this program and delay making some of the tough decisions that I need to make about the future of my agency. And the first thing that I would encourage you to do is to crunch the numbers.

Make sure that taking in this money and the corresponding pledge not to lay off any of your employees or if you’ve already laid them off to rehire them immediately.

Make sure that that actually works out for you in the long term.

It’s something that is You need to think about carefully because really what you ought to be doing is using this cash to give you runway to make the changes in your business that you know you need to make.

Chances are your business is different today than it was three or four weeks ago, the economy is certainly very different, the outlook is different. And you need to be thinking about the changes that you want to make.

Take advantage of this cash to allow you to make a more gradual transition that gives a better outcome to your employees. That helps your business put itself on solid footing.

But if you use it to delay making those decisions and assume that things will get back to normal very quickly, or that you’ll be able to recover some of that lost business right away when this current situation comes to some sort of resolution in the next few months.

The reality is you need to be making those changes now. And if you use that cash to hold off, you’re just going to put yourself in an even tougher position two or three months down the road.

So crunch the numbers. Don’t delay making the tough decisions and instead, start implementing the change that you know is needed now

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