Skip to main content


The US government has debated whether a second – and final – round of Economic Impact Payment or simply an IRS stimulus check will be needed when the country reopens. This follows the $ 2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, Stimulus Package 1, which was passed by Congress in March and included several programs for small businesses affected by the COVID-19 outbreak.

Starting June 1, the Senate began deciding whether to approve the first CARES federal stimulus bill, which included cash grants, soft loans, and taxpayer payments, or to come up with an entirely new stimulus plan. It can mean waiting a few more weeks before Congress makes a final decision and sends the bill to the President.

But there is certainly a demand for a second round of stimulus payments caused by the current turmoil surrounding the pandemic and other economic issues. According to a WalletHub survey, 84% of Americans want another stimulus check. President Donald Trump himself has signaled his readiness for another stimulus package.

Since every business owner is a citizen first and foremost, if you qualify for a coronavirus stimulus payment, it is important that you do everything possible to receive that financial aid as soon as possible. These stimulus programs have limited resources and are awarded first.

Also some new federal programs aiming to help companies affected by the coronavirus have been hugely popular, including the Paycheck Protection Program (PPP), which since the opening of the application window on 3.

The PPP program is an SBA loan designed to provide small businesses with a direct incentive to keep their employees on payroll. Other notable programs to provide small business financial support during COVID-19 can be seen in the US Chamber of Commerce chart below:

Similarly, in the UK, lenders have been approved to offer a bounce back loan program, including Bank of Ireland UK and Skipton Business Finance. The program had a tremendous impact, with over £ 5 billion in funding approved in the first three days.

Overall, for many businesses, these stimulus checks can be the most significant cash inflow over the life of the business, and many founders may wonder how best to use these funds.

Since many companies are using financing at this time to only survive when it comes to growth after COVID, should companies then look for debt capital and quick financing as viable alternatives to private equity?

Reece Tomlinson, CEO of RWT Growth, a management consultancy for global SMEs, offers the following advice for SMEs:

“This amount of money that businesses across the country are receiving has been a much-needed lifeline, but it could systematically transform the way businesses view funding options Open up opportunities that debt offers. “

To help move all of this forward, Reece offers expert advice on how to deal with quick finances:

1. Change your mindset.

For many companies, this is the first time they have been exposed to significant debt. It is critical to change your mindset away from “all debts is bad” and see it as good debt, bad debt, and unsustainable debt.

2. Hold on as much as you can.

When receiving a large sum it can be tempting to pay off as much debts and obligations as possible, but prioritizing what keeps the business going is important. Some tax invoices have been deferred – like sales tax – make sure that you do not spend this capital on invoices that can be paid at a later date.

3. Managing cash flow is paramount.

Every effort must be made to ensure that the SME does not burn unsustainable amounts of cash that could otherwise force the SME to close its doors. Receiving assistance in the form of this loan or debt financing should not change the need to improve the company’s cash flow.

4. Debt must be repaid.

This is important because at some point the company needs to be able to make payments out of the company’s cash flows. For example, if the SME borrows £ 250,000 through the CBILS, you can expect your future cash flows to be at least £ 50,000 less annually for at least five years (assuming no interest or fees are charged by the lender).

Businesses should conduct an affordability test and financial model prior to submitting an application to understand best and worst case sustainability of the debt they have taken on.