What to Do When Your PPP Money Runs Out

What do businesses do when their PPP or Payroll Protection Program funds run out? While small companies can apply and receive relief, that money is only finite. It will go just so far before it’s gone. And, once it’s gone, it’s gone for good. Even organizations with business interruption insurance benefits have limited resources. Eventually, the cash will run out. So, what do small businesses do then?

PPP Loan Forgiveness Only Solves One Problem

It’s important to remember that PPP loan forgiveness — while most certainly helpful — merely solves one problem. Meaning, there are still other debts and obligations to pay and to meet. That alone reveals the fact there’s a lot more to doing business than just compensating employees. Vendors, contractors, and others also need to be paid.

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. —U.S. Small Business Administration

This gets to the heart of the larger issue — the inescapable reality of the business world. Put another way, if someone paid off one of your personal debts and you had five, six, or ten more, while that’s a blessing and it’s appreciated, it does not get you totally out of debt. Businesses don’t operate that way because there’s always additional obligations.

What to Do When Your PPP Money Runs Out

Since businesses stay in a cycle of dynamics, with revolving credit and monthly bills, and they apply and receive PPP money, what can they do once those funds are gone? Here are a few suggestions that might prove helpful to your business:

  • Offer invoice financing. Instead of requesting (or demanding) the entire invoice amount to be paid, give them the option to finance their outstanding balances. You can charge a small fee and/or interest rate — so long that it’s legal and ethical.
  • Ask suppliers for extensions. For businesses that owe other businesses money, it’s worth a shot to ask for some more time or at least try to establish payment arrangements. This will help to take off a little pressure and to free up some cash.
  • Review personnel staffing choices. Most businesses already have or will soon, be forced into this scenario — assessing which team members aren’t essential. It’s a tough spot but because employees most always represent the largest expense, this can’t be ignored.
  • Consider liquidation or selling equipment. Another thing you can do is to sell off non-essential equipment, if available. Or, liquidate some inventory or materials. These are all difficult decisions but they could mean the difference between staying in business and going out of business permanently.
  • Offer new services that are in demand now. Look at what services are in demand now that may be in line with your service offerings or a close extension thereof to provide immediate cash flow. Quickly shift to provide those services by promoting them to your current customer base and use social media to get the word out. Several industries and businesses have done this in recent weeks.

What other suggestions do you have? Please share your thoughts and experiences by commenting!

Interested in learning more about business? Then just visit Waters Business Consulting Group.

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest

Related Posts

Business stock photo

How Kitchens by Good Guys Broke Through the $1 Million Barrier

Shannon Carfield and Dean Eckonrode started Kitchens by Good Guys the way a lot of contractors do: one small job led to a referral, which led to another job, and eventually a business grew up around them almost by accident. It worked, but it also stalled. Years in, revenue had plateaued below the $1 million mark, and the couple knew that reacting project-by-project wasn’t going to get them any further. “Like many business owners, we wanted to work less, earn more, and be in a position where we could take some time off,” said Shannon Carfield, Owner. “Our challenges were wanting to grow to the next level and needing a plan to do that. We also knew we needed some expert advice to help us get there and that’s why we reached out to John in 2016. We’ve been with him ever since.” Growth Without a Plan Has a Ceiling Like many home improvement businesses, Kitchens by Good Guys had built its reputation on word of mouth and solid craftsmanship — but not on a strategic plan. Without a roadmap for predictable growth, the company’s revenue and cash flow moved unpredictably from month to month. Margins were also under pressure: Shannon and Dean were still taking on a mix of smaller, lower-value jobs that ate into the time and capacity they needed for higher-margin kitchen remodels. On top of that, they were trying to find and hire the kind of high-caliber talent that would let them step back from day-to-day work, without the infrastructure in place to support a bigger team. Building the Infrastructure to Scale Waters Business Consulting Group’s engagement with Good Guys Remodeling started with the fundamentals: a financial forecast model built around the company’s real numbers and real goals. From there, John Waters and the team worked with Shannon and Dean to build a formal Strategic Growth Plan that identified exactly what resources — people, systems, processes — the business would need to scale. Rather than chasing every lead that came in, the team segmented the company’s existing contact database so outreach could focus where it mattered most: large referral partners, strategic partners, and direct consumer sales. An organizational chart came next, prioritizing which roles to hire first and clarifying who owned what operationally, so Shannon and Dean weren’t the default answer to every question. To keep everyone accountable to the plan, the team also developed key performance metrics that were tracked weekly and monthly against top-line revenue goals. Breaking Through — and Staying There The shift wasn’t just financial; it was about the systems underneath the numbers. With clearer processes and procedures in place, Kitchens by Good Guys tied key performance indicators directly to employee compensation, creating real accountability instead of vague expectations. Lead flow became more consistent, giving the business a more predictable pipeline and more reliable revenue. And with key talent added alongside those new processes, Shannon and Dean were able to start stepping out of daily operations and into the roles they’d actually wanted all along: focusing on strengths, working on the business rather than just in it. The results speak for themselves. Waters Business Consulting Group worked with Good Guys Remodeling for more than three years, helping the company break through the $1,000,000 revenue barrier in 2017 — putting them in the roughly 7% of U.S. businesses that ever hit that mark. By 2020, the company was on pace to break $2 million. Along the way, the mix of work shifted too, with more dramatic growth in higher-margin kitchen remodeling opportunities and a steady phase-out of the lower-margin projects that had once filled the schedule. Ready to Build Your Own Growth Plan? Every business that plateaus has a path forward — it just takes the right plan, the right accountability, and someone who has done it before. If your company has hit a growth ceiling, or you’re ready to start working on your business instead of just in it, a conversation is the first step. Contact Waters Business Consulting Group to schedule your free consultation.

Read More »
Waters Business Consulting Group

How Successful Entrepreneurs Stay Calm Under Pressure

Every business owner faces the moment when everything seems to go wrong at once. Your heart drops, and your instinct is to panic—but that’s exactly what separates top performers from everyone else. Research on over a million people found that 90 percent of high achievers share one skill: staying calm under pressure. Here’s how they train themselves to do it.

Read More »
Money illustration

The ‘Ghost Money’ Formula: How Small Businesses Can Hand Out Meaningful Annual Bonuses Without Draining the Bank

Small businesses and bonuses aren’t synonymous. Such “lavish” gifts are associated with big companies and organizations with tons of employees, bringing in oversized profits. But there’s no denying the benefits of bonuses: increased motivation and productivity, improved morale and retention, and better alignment with company goals. However, small businesses often operate on small margins or moderate profits, making every expense count. So, how can a small company reap the benefits of giving employees bonuses when money is tight?

Read More »

Imagine Selling Your Business…

How Would Your Life Change?

You didn’t start your business just to stay busy—you built it to create freedom, security, and options for yourself and your family. Selling your business can be life-changing, but the real question is whether you’re intentionally building toward that outcome or simply leaving it to chance.

Sign up below for a free consultative session to learn what your business could be worth today and in the future! 

Thank you for your interest in learning what your business is worth. We will be in touch shortly.