Once your loan is completed, there are several areas of your company you can and should invest in.
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The CARES Act passed by Congress in March was a much-needed lifeline for thousands of American small businesses. Of the many programs it created, the Paycheck Protection Program did more than any others to keep companies afloat. According to a survey conducted by payroll services company OnPay, 52% of all small businesses received a PPP loan of some kind.
While some PPP loans were eligible for full forgiveness, others needed to be paid off in full depending on the size of the loan and what it was used for. For the businesses that do manage to pay off their PPP loans, the final payment can feel liberating. The question must be asked, however: What is a business to do once the loan is paid off?
Some sectors are booming while others are still on shaky ground; no matter what space your company is in, the freedom you have once you’ve finished paying off your PPP loan can be used on a number of different endeavors. Here are some of the best.
Even the best PPP loans couldn’t prevent all companies from slimming their workforce: by April of this year, 21% of companies had already laid off significant numbers of their employees, with another 64% planning to do so in the near future, according to a study conducted by the Kenan-Flagler Business School at UNC. Once the onus of repaying your loan is lifted, give back by rehiring.
Weekly unemployment claims are rising, unemployment benefits are expiring, and workers need help. Reinvesting in your workforce now can ensure that your team is wired and strong once the pandemic subsides. By reenlisting some of your previous workers, you can boost morale and strengthen your company in the process.
2. Invest in new technology
Just because Covid-19 has slowed things down doesn’t mean the world is no longer moving forward. Globalization continues unabated, technology becomes more powerful with every passing minute, and businesses that don’t keep up are asking to get left behind.
A survey of Fortune 500 CEOs published in the Harvard Business Review found that 63% of them were planning on accelerating their investments in technology despite the financial stress caused by the pandemic. Even if you’re not investing in new technology, your competitors are. The money you had been using to repay your PPP loan can now go towards the cutting edge R&D your business needs to compete.
3. Rethink the office
During the unknowns of a pandemic, selling your office or giving up a lease is never an easy thing to do, and regular PPP repayments can make the prospect of doing so even more daunting than it would normally be. Once a loan is paid off, however, business leaders are presented with a number of different choices: new office? Smaller office? No office?
When it comes to reshaping the workspace, start by listening to your employees. According to a survey conducted by PwC, nearly three quarters of workers say they’d like to work from home at least two days a week. Whether it means a fully virtual office or simply one that can accommodate a large number of employees working remotely, your team is ready for you to change up the office in a major way. With your newfound financial freedom, you’ll be able to do just that.
4. Run a flagship campaign
A study done by SurveyMonkey found that more than 40% of businesses have slashed their marketing budgets in the face of Covid-19. While marketing is almost always one of the first parts of a company to slim down when things turn south, it should also be one of the first to get beefed up once things turn around. Getting the word out about your business is more important than ever, and now is the time to do so.
During economic downturns, consumers are looking for alternatives to their normal purchases: things that are cheaper, work better, last longer or just feel like a better value overall. The right ad campaign directed at the right groups can let your company fill this niche in ways that others simply aren’t. Spare no expense — this could be a breakthrough for your business.
Paying off any loan feels great, but sending that final check to the PPP is something else entirely. It shows that your business went through the worst of it and emerged on the other side, battle-scarred and ready for more. Take your newfound financial freedom and seize the day with it.