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The Laguna Beach Chamber of Commerce is dedicated to helping local companies grow their businesses by taking the lead in programs to create a strong local economy.
Business survival in the COVID-19 era
If you are like most of us in business, in a few short weeks you have gone from wondering how to make your business grow and be more profitable to planning for its survival.  COVID-19 and the rules about social distancing and isolation from others as much as possible have changed your interactions with customers (your business may have been ordered to close its doors and most of your customers are staying home); with your employees (you may have had to lay some or all of them off, or you may be paying them from your non-existent profits); and with your vendors.  It’s a pretty hopeless feeling, and the only bright spot is that it may, sometime, end.  The question on your mind, however, may be whether your business will survive to see that ending.
Some businesses will not survive.  The owners of many of those will have stubbornly refused to accept that there is a new reality that must be dealt with.
The businesses that do survive will use every resource they have available to them to make changes and to react rationally to the new reality of business.  You have resources, even if you don’t realize that you have them.  You need to work with advisors you can trust to help you mobilize those resources so that your business can survive and maybe even prosper in the post-COVID-19 world.
New resources:  Your CPA or other trusted advisors can lead you through the recently passed Coronavirus Aid, Relief, and Economic Security Act, known popularly as the CARES Act.  The act is complex with many interactions, but its purpose is to help businesses, and in particular, it is there to help your small business. The rules below are true for businesses with 100 or fewer employees.  If you have more than 100 but fewer than 500 employees, there are modifications to what is cited below, though the provisions still exist for you.  Among the relevant provisions:
  • $10 billion is available for emergency grants (of up to $10,000) to provide funds for small businesses to cover immediate expenses.  The loans will be funded within three days of a successful application.  Details are on the SBA website at  A streamlined application was recently introduced and is at    You should go there to start.
  • You may be eligible for a forgivable (you don’t have to pay it back and it will not be counted as income to your company) loan through the SBA.  The pool of money for these loans is $350 billion, and if your firm was in business on March 1, 2020, and employed individuals, you likely qualify.  Any portion of the loan used to maintain payroll, keep workers employed, or pay for rent, mortgage, and existing debt can be forgiven if workers stay employed through the end of June.  The loans may be for the lesser of 2.5 times the average monthly payroll for the 12 months before the loan is made or $10 million.  You should go to the SBA website cited above and see your banker regarding these loans and the paperwork and details surrounding them.  If you have one of these loans, the following sections on payroll taxes are not available to you (because, presumably, you will have used forgiven borrowed money to pay them).
  • You can defer payment of employer payroll taxes throughout year 2020, and instead pay them in two installments, one on December 31, 2021, the other on December 31, 2022.  Deferring 6.2 percent of your employee costs interest-free is attractive!
  • If your business was closed by government order due to the COVID virus, or if your gross receipts declined significantly (a 50 percent or more decline in business from the same calendar quarter a year ago is the general standard) you may be eligible for a payroll tax credit of as much as $5000 per employee for the year 2020 wages and health benefits paid after March 12, 2020.
It is easy, as you watch your revenues go down, to believe there are no solutions.  It is important that the business owner uses all the resources available, only some of which are listed above. Start by using your own internal resources—the people who help you with planning and budgeting—and your professional resources, including your CPA, attorney, and banker. 
Your business can survive.  In order to do so, you must begin by believing it can survive.

By Michael Kinsman, CPA, Ph.D.
Michael Kinsman was a partner in Kinsman & Kinsman, CPAs in Laguna Beach, which has recently merged with Capata & Company, CPAs. He can be reached at 949-499-8000 or
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