In the fourth episode of the #LoudounPossible Pod, the focus is on financing, as Alice Frazier, president and CEO of Bank of Charles Town, and Chauvon McFadden, principal at Crimson Wealth Strategies, shared their insights.
Both Frazier and McFadden have operated businesses in Loudoun County for years, and have given back to the community through roles on the county’s advisory boards and commissions.
In response to the COVID-19 health crisis, both wanted to share their expertise with the business community, and help unlock access to capital that can help businesses survive through these troubling times.
“I definitely encourage business owners to call their banker. I know banks are reaching out; they’re studying all of the programs that are being offered by the SBA and there’s actually more, not just what was passed on Friday:
- Small Business Debt Relief Program: if you had a small business loan prior to the COVID-19 pandemic impact, you have the ability to get relief of up to six months of your debt payments.
- Economic Impact and Disaster Loans
- Emergency Economic Injury Grants: that can help a business overall.
- Paycheck Protection Program
“They can all work together to help a business, but the bankers can probably help navigate the business owners through that. I would say there’s always the opportunity [for gap funding]. I would communicate with your banker and ask. If you have a long-standing relationship, they know what your business is up to.”
Aside from banking, Frazier has a personal connection to the COVID-19 crisis in the business community: her sister owns a restaurant.
“She, like many restaurants, was negatively impacted by this. Quickly, when the Economic Injury Disaster Loans and Emergency Economic Injury Grants came out, I helped her apply for that. She finished her application last Tuesday and got an email last night regarding the grant. So, I think it’s processing pretty quickly.”
McFadden offered additional insight and called upon small business owners, like himself, to be nimble and creative with financing during these unprecedented times.
“I’ve been through [the Great Recession of] ’08. This is a lot tougher for me than ’08 as far as the changes I’ve had to make in my business. Having to go virtual, not being able to see people, touch people, hug people, and look someone face-to-face, eye-to-eye. It’s a big change, but I think we can do better than survive.”
That starts with knowing your options for how personal financing to save your business.
“The CARES Act has done a fantastic job of providing ways for business owners to get capital very quickly. But there’s also another section that’s very important: there’s a section in the CARES Act that talks about expanding withdrawals and loan options from retirement plans.
“This can be a very fast way and a very easy way for business owners to get capital very quickly by using some of those expanded provisions. I would say that if you’re considering using those expanded provisions from your retirement plans, that you sit down with your advisor and review it so you can see the impact that would have on your situation.
“Typically, when you’re accessing money from a personal account, there’s no application, there’s no credit check, there’s no need to go sit with a banker. It’s simply evaluating that opportunity for you.”