**Disclaimer: This is a politically agnostic piece. Any attempt to bend my words toward or against your partisan ideals is a reflection on you and not on me.**
Another Thursday is upon us! I apologize for the two-week hiatus from visiting your inbox.
I firmly believe the three tenets of Three Action Thursday (building authentic relationships, financial literacy, and personal/professional growth) have allowed me to make logical and intelligent decisions for my family and my businesses in the shadows of this pandemic.
As most of you know, I am a serial entrepreneur. I am the steward of multiple investment properties, a real estate brokerage, and an IT company. Although my real estate related efforts will most definitely be impacted, the coronavirus has had the most significant impact on Leverage Information Technologies (LIT), my IT company supporting the federal government based out of Northern Virginia.
I say significant, not because of the sales or profits impacted by these world events, but because of the number of people impacted. You see, LIT has nearly 20 employees, and those employees combined have more than 30 children – a statistic that is not lost on me. In fact, it is a metric I keep and of which I am very proud.
When the government sent us home, and would not allow us in their buildings to support their IT needs, the future of the company and my employees’ livelihoods got murky. But then our country’s leaders passed the CARES Act on March 27th.
That piece of legislation has changed the vernacular of our nation. We began using the term “stimulus” more often, people learned a new acronym: the PPP (Paycheck Protection Program). The PPP, among some other things, offers small businesses a forgivable loan; in some cases, this could be a quite sizable forgivable loan. (Think tens of millions.) The media has jumped on the likes of Harvard and Shake Shack for “abusing” the system and taking advantage of the legislation at the expense of other small businesses. (Both organizations have now decided to “return” the money.)
Although the Act is not perfect, the truth of the matter is it has helped businesses survive and has kept people employed and paid.
In the midst of this, I made the difficult business decision that LIT would NOT be taking the PPP forgivable loan money and would instead leave those funds available for other small businesses. We had an approved application and were within 24 hours of being funded, but ultimately I decided we just didn’t need the money and taking it was not in alignment with my financial principles of avoiding debt (even the forgivable kind).
Besides having a healthy corporate emergency fund, there is a lesser-known part of the CARES Act that completely clarified the path forward for LIT and in the end, allowed us to decline the PPP funds. Section 3610 of the legislation implores government agencies to compensate contractors for remaining in “ready state” to support that agency’s mission but are being forced to stay away due to the coronavirus. Section 3610 will allow LIT to continue paying its employees. Meanwhile, we are actively working with our partners and the government to establish work from home opportunities for our employees.
This pandemic has also affected many of LIT’s competitors, and whether or not they take the PPP funds is their choice. However, I am proud that I can say nearly 20 employees and their 30+ dependents will continue to be supported by a company I founded and built on financial principles I use not just in my business but in my personal life as well.
Quick personal audit:
- Ask yourself: Do I have financial principles? (If not, you should probably brainstorm that before moving on to #2.)
- If you have some financial principles that you can say out loud but have never written them down, WRITE THEM DOWN.
- If you have some principles, and you’ve written them down, SHARE THEM. Sit down and go over them with your significant other, or find a trusted friend to share them with. Or, send them to me. I’ll let you know what I think.**