Didn’t qualify for CEBA or BCAP? You still have options.
By ATB Financial 13 August 2020 5 min read
If you’re an Alberta business owner, you likely applied for help in these tough times from programs like the Canada Emergency Business Account (CEBA) and the Business Credit Availability Program (BCAP).
But not everyone was able to secure those loans. If you’re in this group, you might worry that the crisis will continue to bruise your business. Know there are still many ways you can boost cash flow and remain relevant to your customers.
First, you should realize you are not alone. As the Globe & Mail reported, “many small-business owners say they won’t qualify because of restrictions around payroll criteria…. [And] many small and medium-sized businesses already feel left behind because the federal government’s key programs for entrepreneurs are focused on loans that add to a company’s debt, including the CEBA.”
So if you don’t get relief funding in the form of loans, you might be better off. The funding the programs provide is not free—eventually, it needs to be paid back, with interest.
“If you don’t get that funding, it’s one less thing to worry about as a business owner,” says Carly Wells, senior manager of ATB BoostR.
Some fast cash might help a business through the next few months, but it won’t solve cash flow issues in the long run. If you didn’t get funding, you might find it easier to focus on the big picture, and look elsewhere for a more secure financial modeling path.
Small business advice for managing staff expectations, shorter sales cycles
If you didn’t access hoped-for funding, you might have to break the news to staff, which could lead to negative emotions around the office.
“It’s natural to feel rejected in this scenario and that kind of news can weigh heavily on everyone’s chests,” notes Wells, “but you have to move beyond that rejection and look for other options that can help with cash flow.”
Framing that message to staff takes tact. A good long-term plan can also make a big difference—“here’s our strategy to move forward” is a more proactive and positive way to start the conversation than “we didn’t get the funding.”
Next, you need to bring cash flow forecasting to the table, which we’ve covered in another report. As Meghan Dear, one of the ATB X Managers on the Business Everyday Advice Team, puts it: “You need a way to model the future with different scenarios.”
Kate McKenzie, manager at ATB X, offers another method you could take to assist with cash flow.
“Look for opportunities for shorter sales cycles,” she says. “Often, people only have one type of product and during the pandemic that presents challenges where that product could be held up in customs or doesn’t make it to you from overseas. So I’ve been encouraging entrepreneurs to reevaluate the products they have on offer and to find out if there is another product to bring to market with a shorter sales cycle.”
She cites the example of Calgary’s Reliable Lighting Solutions, which makes lighting products for large industry spaces. When some of their main products were held up in China at the height of the pandemic, they decided to create a home-oriented lighting solution ideal for remote workers—a desk light that brightens up Zoom calls.
“Now that’s how you pivot!” McKenzie says.
Strengthening your online presence
For many Alberta businesses, especially in the B2C space, going online is no longer a whim—it’s a necessity. And if there’s any time to get creative with what you offer online, it’s now.
“Pivoting online requires you to analyze what you can sell online, even if it’s not the usual products you have in your bricks-and-mortar space,” McKenzie says.
She cites another example of Calgary-based Fresh Fitness who took their classes online so they could be accessible virtually. They also offered a free lunchtime class so they could improve their service offering for clients and attract potential new customers at the same time. They didn’t just stop at one revenue option though. Tim Borys, the founder of Fresh Fitness, also released a new book about maintaining productivity while working from home with recommendations that linked back to his online wellness offerings.
If you operate physical locations, ensure that your company’s health and safety standards are posted prominently online, McKenzie adds, so customers feel safe when they return.
Experts also recommend harnessing your online community as a way to keep customers informed but also excited about your business.
“If there’s one thing the pandemic has shown us is that people want to support their local businesses and see them keep their doors open,” says Wells.
Could crowdfunding help your business stay resilient?
Another option for you to help with cash flow is launching a campaign on a crowdfunding platform like ATB’s BoostR. This free platform is open to only Alberta businesses and you don’t need to be an ATB client to set up your campaign.
With BoostR, “you aren’t just asking for funding, but asking for support in exchange and those customers are still getting a reward in the end,” says Dallas Beeston, manager at BoostR. “Loans might not help your business in the same way that a crowdfunding campaign can, because this is money you don’t have to pay back.”
A successful crowdfunding campaign can not only give you more lead time to stay afloat, it can also make you more attractive to investors, Beeston says, adding that displaying customer support in such a clear way shows investors your audience will stick with you through difficult downturns.
What if your business plan points towards closure?
If funding attempts on all fronts prove unsuccessful, and if debt has reached an insurmountable level, it may be time to close up shop. But that doesn’t mean the end of your entrepreneurial journey.
“Take this business closure as a learning experience,” says Beeston. “Look at the positives of running your business too and apply what you learned to your next business venture.”
Wherever your business is at currently, there are resources to help you find a path forward, says McKenzie. She recommends learning about when it’s time to sell, and hearing from other businesses about their journeys like those shared in our recent Fumble, Fix or Fold webinar.
“Keep your head up and focus on the future,” says Wells.
“As we like to say, once an entrepreneur, always an entrepreneur.”