Crisis Cost Reduction Strategies for Non-Essential Business Closures Due to Covid-19
Business Expenses and Areas to Focus On Now
First and foremost, I hope you, your employees and your families are holding up during these very extraordinary times.
My team and I have been asked by a number of our clients, collegues, advisors and friends different questions on various topics about ideas on savings in these difficult times. I wanted to share with you a few areas that may help during this time for any business that is struggling or just looking to tighten up expenses :
Things You Can Do Immediately
1. Forbearance Items
Business Rent any business that leases their buildings can work with landlords to hold off payments. Ask your landlord to hold off payments for a month or two, add to the back of your lease, or spread over remaining months. If you fill out response we will send you a sample letter.
Personal credit cards, auto and mortgage – contact your institutions immediately and get their policy. Most will allow you to postpone payments for 2 months, without adverse consequences.
2. Apply for Payroll Protection Program (PPP) and SBA Loan
Apply to https://www.sba.gov/coronavirus companies under $12M in revenue and under 500 employees can get a loan for 2.5x their average monthly payroll.
3. 401K Qualified Plans
• You can borrow up to $100,000 from your 401k plans assets without 10% penalty and pay back over 3 years
• Freeze your Employer Match on 401k
• Freeze Defined Benefit Plan for 2020
• Ask your advisor to lower their fees (typically 100 basis points to 25 basis points)
4. Shop Your Ancillary Benefits (savings by next invoice)
• Short-Term and Long-Term Disability, Life and Accidental Dismemberment we are negotiating 35% to 45% savings
• Dental up to 18% savings
5. Shop Your Ancillary Benefits (savings by next invoice)
• Converting a portion of your 401k to a Roth 401k. The rules allow you to convert $19,500 under age 50 and $6,000 catch up over age 50. So while the market is down you can convert $22,500 age 50+, pay the tax in 2021. There are no income limits within a 401k plan.
• Life Insurance – we can secure $500,000 to $5,000,000
o Without an examiner coming to your home, without blood or urine
o Complete online or by phone
o Same day policy binding
For more information: https://www.lifebrokeragellc.com/keyarxgrou