Mitigating Risk During the Re-Opening Process

A close up photo of a DWH employee working on a computer.

A Question and Answer with OVD Insurance

As many businesses have begun going through the process of bringing people back into their places of employment, we recognize that there are many different angles that need to be considered and risks that need to be understood and managed properly. We spoke with Josh Van Vels from Olivier-VanDyk Insurance and asked him to share his expertise in the areas of insurance and risk mitigation as it relates to the reopening process specifically.

  • What are some areas of increased or potentially overlooked liabilities associated with reopening post-Covid?

The obvious concerns are going to be positive tests and workers’ compensation liability related to the transmission of the virus within your workplace and compliance with ever-evolving Executive Orders and OSHA/CDC guidelines. One overlooked exposure that many employers are creating is overselling what you’re doing as a business to respond to COVID. Organizations that create detailed policies, signage, and communication pieces that don’t align with actual practices are potentially creating issues for themselves, especially given the reluctance of a certain subset of the employee population that is looking for ways to stay on unemployment and not return to work. You’ve got to be careful when you’re saying what you do that you are doing what you say. As evidence of this exposure: many insurers offering Employment Practices Liability programs are on an underwriting freeze for new business due to this general concern (as well as the potential for large reductions in employment).

  • What are the main risk mitigation steps that a business should be taking when reopening?

The steps should look like this:

1) develop a COVID response team or designate those responsible for developing the return to work procedures and guidelines;

2) Communicate the steps you are taking as well as those required of employees upon return to work;

3) Those responsible for risk management and insurance should have in-depth understanding of the insurance implications as well as the areas where insurance will not respond to this new exposure;

4) Train and document all employees on the new program;

5) Make sure leaders and managers are focused on diligence and responsiveness, not fear. Many employees are fearful of coming back to work, and leadership needs to help them feel comfortable knowing that their safety has been priority number one and that the team has a response plan for whatever may come next.

  • How can your insurance agency be a partner in the reopening process?   What does your agency do to help clients?

If your insurance relationship wasn’t actively involved in your response starting in March, it might be time to evaluate either a) the service capabilities of your relationship or b) your relationship entirely.

It’s nearly impossible for most businesses to sort through the day to day changes from the CDC, state OSHA departments, and multiple state EO’s. Your Risk Management partner should be feeding that information as it evolves. Most insurance agents/brokers will have a bucket of “tools” that you should be tapping into, such as Learning Management Systems, Risk Management Information Systems (RMIS), training resources, etc. – the quality and depth of which will vary. The issue with most insurance relationships is that these tools are available only to those who ask – they should be brought to you, especially in a time like this.

Our agency has several Risk Solutions Consultants that have been involved with hundreds of clients from day one of the pandemic. Our Learning Management System has several hundred active users, our proprietary RMIS system has been critical for large clients in assessing the incident and exposure changes that impact their insurance spend in real-time, and our consultants have been all over the place helping employers adapt their workspaces for employees to return and in developing COVID response programs.

Times like these really expose firms focused on just selling insurance vs. providing a true risk strategy that insurance is just a part of.

  • What should business owners be thinking about during the reopening process?

Every crisis is an opportunity. As business owners and operators put in the hard work of reopening and getting back on their feet, it’s a good time to put serious consideration into the depth and quality of their team and their vendors. For instance: if you’ve been going through a three agent RFP or “bidding” your insurance, you’re probably with a low-cost provider, and the odds of deep response resources will be low.

If your team has gone through the motions on Environmental Health and Safety, you’re probably much more exposed through this than the business that values operational efficiency built off of a safe and healthy culture. Your employees will be slower to return if they don’t think you’re taking it seriously.

All situations like this are an opportunity for leaders to step back and assess whether they’ve built a quality organization with a good depth of leadership or a revenue-generating mechanism that’s missing the big picture.

  • Are there new coverages business owners should be thinking about or existing coverages that you should be reviewing?

With all of the discussions we’ve had on business interruption or Loss of Business Income and Extra Expense coverage, it’s more evident than ever that our role as insurance advisors is to educate first and foremost on what is available to businesses from the insurance market and what it does. So often the insurance agents/brokers act like insurance gophers – we’ll take your information on what is in place right now, go back to our office with it, and then come back with a slightly lower price on the same coverages. Are you being educated?

The goal of any insurance advisor should be that uncovered losses are not a surprise, but were an economic decision you made based on the cost of the products available. Buying less insurance is our goal, and you can only do that if you feel comfortable in your assessment of the risk or exposure to your business relative to the cost of insuring that risk. As we like to say, everything is insurable; it’s just not always affordable.

  • Are there any rebates or premium reductions that companies should be looking for?

Beyond the reduction in exposure (sales, payroll, vehicles placed on layup schedules, etc.) there is not much that can be done without reducing coverage at this time. Many businesses are strategically assessing their coverages, of course, but one overlooked item is pay plans. An example: we wrote a large auto manufacturer with roughly $400,000 in workers’ compensation premiums effective 4/1, and we were able to place them on a “pay as you go” plan that coordinates with actual payroll period numbers. Because this business was shut down with the Tier 1 auto manufacturers, they were able to essentially forego payments on their workers’ compensation for two-plus months until they reopened. In the end, this really didn’t swing their spend, but it dramatically eased the pressure on cash flow. The insurance programs we develop are full of small opportunities like this, but you have to be working with a broker that thinks like a business person, not a salesperson.

Leadership Characteristics in Successful CFO’s

Business person

In this environment of tightening liquidity, increasing leverage, and high-risk performance, is your CFO up to the challenge? Weak operations in finance can pose legal and financial risks to your company while also undermining the credibility of your finance department itself. As a business owner or CEO, getting your financial house in order is one of your first and most important responsibilities.

As a side note, if you are not sure if your business should have a CFO or Controller at the helm of your finance team, we suggest you read DWH’s blog article, “Does Your Company Need a Chief Financial Officer?”.  We believe that these two positions are very different and require different skill sets.

Below are five skills your current CFO should possess to ensure they are maximizing cash flow and minimizing risk for your business.

  1. Anticipation

A strong CFO focuses on creating and increasing the value of the business for the benefit of shareholders and all stakeholders. This is done through intimately understanding the activities which impact operations and, ultimately, the performance of the business. In addition, they identify “game-changing” information and global trends which impact your industry and are able to assist in the development and execution of strategies to successfully address what is happening in order to protect and take advantage of opportunities.

While finance doesn’t own the business’s strategy, they are responsible for being the institutional memory of the company and should be offering a framework against which the company can present strategic choices of how they are going to develop and grow.

2. Critical Thinking

Developing a comprehensive financial strategy requires a CFO to balance the current needs of the company with the long term financial health of the company. He/She should be able to develop different cohesive long term strategy options using a deep knowledge of the company’s cost structure, and ability to analyze current and potential core business vs. non-core business opportunities and an ability to integrate input from sales, operations, and leadership.

In addition, your finance department should have solid procedures and internal controls in place to protect company assets, reduce risks, and allow key functions to grow and achieve the company’s business strategy. These controls also allow the CFO to evaluate the risks associated with the opportunities your business is facing. An example is the utilization of a capital acquisition template to calculate the payback time of a company’s investment.

KPI’s should be in place and regularly used to manage business value and performance, including Debt to Equity, Current Liquidity Ratio, Debt Service Coverage, EBITDA, Return on Net Assets, Return on Invested Capital.

3. Interpretation

A strong CFO seeks multiple data points before developing a viewpoint. While respecting the boundaries of other department leadership, he/she then provides unbiased analytics to promote a structured fact-based approach to decision making. This information is shared using communication methods best understood by other departments and leadership, which may include the utilization of pictures and analogies, not just purely analytical numbers.

The CFO must be able to work well with other leaders within the company to gather the relevant information and synthesize it for decision making and analysis.

4. Decision Making

A capable CFO balances speed, quality, and agility to avoid ‘analysis paralysis’ during the decision making to arrive and execute on ‘good enough’ positions. Effective CFO’s develop and utilize a variety of tools to assist them in making and communicating decisions.

As an example, a conservative twelve to twenty-four-month forecast, rolled monthly, allows a CFO to evaluate current and future liquidity needs, available capital, and understanding future risks and opportunities.

Timely and accurate financial and operational reporting, which measures actual results against budgets and long term plans, should be received by appropriate stakeholders. This should include income statement(s), balance sheet(s), cash flow and schedules, monthly budget versus actual performance with an explanation of variances by the 5th business day following the end of the month.

Additionally, and especially relevant in the current economic crisis, a CFO should have a detailed 13-week cash flow forecast that can be used to manage liquidity (make decisions on cash in and cash out) and communicate with key stakeholders.  For more information on effective cash flow forecasting, please see DWH’s article “Preserving and Improving Liquidity During a Crisis.”

5. Alignment

Lastly, your CFO/Controller should be engaging key stakeholders in ongoing professional dialogue so as to build trust and instill a deep focus on value creation throughout the organization. They should be sharing the business strategy and the necessary framework to support it through all written, verbal, and face to face (or virtual) forms of communication.

External communications with lenders and other important external stakeholders regarding the current state and future plans of the business are just as important as internal communication. This consistent and accurate communication will build trust and credibility with these stakeholders, which is the key to successful collaboration.

Leadership is a series of behaviors that determine outcomes. If your current outcomes are unacceptable or are inadequate, then the underlying thinking and expectations need to change so that fundamental changes in behavior can occur. Having competency in the five categories above will help drive the outcomes your company establishes in its strategic plan.

You are not alone. At DWH, we’re here for you, even remotely. A lot of our clients have questions about how to mitigate business value erosion and how to manage communications with banks/creditors/ vendors/customers, etc.  We are here to help you.  Please feel free to contact us.



This post was written by Heather Gardner | LinkedIn

All companies experience change.
Plan for it with us.


Effective Leadership
In a Crisis

Leading in a crisis can make you question everything you know about leadership. You will need to think and act in ways that are unfamiliar and uncomfortable to you. You are not alone, and even the most successful and confident leader will be challenged during this time. Remaining calm and having a sense of perspective while focusing on moving from surviving to thriving is vitally important. To accomplish this, a leader must provide clear vision, effective communication with stakeholders, and a laser focus on the execution of tactical plans.

Clear Vision

In a crisis, a leader needs to develop a clear vision and comprehensive strategy to ensure the business will thrive on the other side of the crisis. The strategy should start with the values of the business as the foundation and then include tactical plans to actively manage and mitigate current and anticipated risks while sustaining current and future cash flows. This is done by identifying game-changing information in and on the periphery of your industry, processing the information quickly, rapidly determining what matters most, and making decisions. You need to ensure your business does not grind to a halt due to paralysis analysis but focuses on business continuity. Successful leaders maintain this focus even in a crisis.

Effective leaders also take personal ownership of what is happening around them. They understand relationships matter even more during a crisis, and they face their own emotions, show respect for others, and make sure they and their leadership team are grounded, visible, and available. You need to model the behavior you want others to do within your organization. During this time, reach out to your customers, suppliers, and team members to make sure they are doing okay in this time of crisis.

As the situation stabilizes, look to how your team responded in the crisis. Which team members rose to the occasion? Which team members could see what was needed to get things done quickly and efficiently? These reactions will tell you a great deal about your team and help you to develop a succession plan as you revise your strategic plan to address your new normal.

Communication with Stakeholders

The need for ongoing communication with key stakeholders cannot be stressed enough.  Stakeholders include employees, customers, vendors, owners, lenders, and the community.  Successful organizations identify all key stakeholders, take the time to understand their needs and expectations, and then clearly articulate how the company’s plan meets those needs and expectations.  Leaders also need to communicate what the company needs from those stakeholders to execute the plan.

Be sure to communicate frequently with these internal and external stakeholders while bringing and maintaining perspective about the crisis. Being transparent about what solutions your company is pursuing rather than just communicating the issues will allow you to get ahead of the crisis.

During this time, it is your job to address all stakeholders with honesty, a clear accounting of the challenges your business is facing, an invitation for feedback as well as credible hope that your business has the resources needed to overcome the challenges.

Execution of the Plan

Execution includes planning, organizing, directing, and controlling activities to ensure you realize the vision of the organization and achieve the desired outcome. You should make smart trade-offs, name your decision-makers, embrace action, and do not punish mistakes.  The use of a daily dashboard of metrics created to monitor your company performance against your priorities will allow you the ability to make transparent and proactive decisions. This will also develop a culture of accountability and alignment.

A successful leader will engage with their team, empathizing with their circumstances and distractions, and motivating and engaging them while focusing on health and safety. Daily pulse checks with individual people in your organization, collecting and sharing positive messages, acknowledging their fears, and encouraging resolve can assist you with this engagement.

Do not forget to reach out to your customers and ask how you can help them. And while having empathy for your team is important, it is just as important to have empathy for yourself. Keep your mind and body in fighting shape to maintain your focus.

And lastly, adapt boldly to your new normal. Circumstances will continue to change as the crisis abates, so seek input and information from many sources, admit what you do not know, bring in outside expertise when needed. Encourage team members to experiment and learn without fear of repercussions due to failure. Throw out yesterday’s “playbook” and work with your team to continue to reassess what your new vision will look like after the crisis abates.

Remember, everyone is going through the same situation at the same time right now – how you handle it will be what defines you as a leader.

You are not alone. At DWH, we’re here for you, even remotely. Let us know what we can do to help. A lot of our clients have questions about what this all means for them, what options and conditions for support or exemptions apply, what implications are for team members, how to mitigate business value erosion, how to manage communications with banks/creditors/vendors/customers, etc.  Although we don’t have all the answers, we are here to help you.  Please feel free to reach out.


This post was written by Heather Gardner | LinkedIn

All companies experience change.
Plan for it with us.


Preserving and Improving Liquidity During a Crisis

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Maximizing the value of a business means focusing resources and energy on maximizing cash flows (improving liquidity) and managing risks.  In the age of COVID-19, this work has become more difficult for many businesses.  Companies are being forced to close, customers are pushing orders or payments, and supply chains are disrupted.  Liquidity has become a hot topic, as more and more companies struggle to preserve their cash.  So how can leaders preserve and even improve liquidity during a crisis?

In our view, the steps to preserving and improving liquidity are building (and using) an effective 13-week cash flow forecasting tool, using the model to identify levers that improve cash flow, using the model to communicate the plan to your stakeholders, pulling levers to improve cash flow, reviewing the model weekly, and continuing to communicate with your stakeholders.  We will explain each of these steps in greater detail below.

Build and utilize a forecasting tool to improve daily decision making and effectively communicate with internal and external stakeholders.

The best tool to use to improve liquidity and capital is a 13-week rolling cash flow forecasting model.  This model accomplishes three primary objectives.

    1. Predict cash flow and collateral, week over week, for the next 90 days.
    2. Allow for or improve decision making at the transaction level.
    3. Allow for or improve communication with key internal and external stakeholders.

A 13-week rolling cash flow forecast shows the details of anticipated cash receipts, cash disbursements, and changes in bank collateral through the forecast period.  Specifically:

Cash Receipts

Your company should forecast cash receipts from:

    • When current Accounts Receivable (AR) will be received.
    • When future revenues will convert to cash receipts.
    • Other non-operating cash receipts (e.g., interest income, proceeds from the disposition of assets, etc.).

Cash Disbursements

Your company should forecast cash disbursements from:

    • Current accounts payable (AP).
    • Future planned expenses*.
    • Other non-operating cash disbursements (e.g., debt service, un-funded capital expenditures, distributions, etc.).

*Future projected expenses can be derived from budgets and recent experience, but should also consider anticipated changes to your business as a result of COVID-19 (e.g., reducing production headcount or hours, renegotiating vendor terms, etc.).

Bank Collateral

The collateral component is often missed in 13-week rolling cash flow forecasting models and can lead to unanticipated liquidity challenges.  Cash receipts, cash disbursements, and other business activities can have an impact on the bank’s collateral and, therefore, the company’s liquidity.  A good 13-week cash flow forecasting model should take into consideration how changes in AR and inventory impact the bank’s collateral and, therefore, the line of credit.

Cash On Hand

Cash on Hand is calculated using the following formula:

Beginning Balance + Cash Received – Cash Disbursed +/- Changes in LOC


Here are a few other things that you should keep in mind as you build your model.

    • The cash flow should be rolled at least weekly. In times of crisis, you may want to roll it daily.
    • As a result, the model should be easy to create and update.
    • The model should be linked to your accounting system or allow for direct imports of data from the accounting system.
    • Have a weekly clean cut off, so you are working with the most relevant and timely data.
    • The model should be reviewed at least weekly by the leadership team.
    • Given the current COVID situation, it may make sense to expand the model to 52 weeks or longer.

A cash flow forecast is a beneficial tool to use when communicating with your stakeholders.  For example, if a customer asks to revise payment terms, you can make the modifications in the forecast to determine the impact on your liquidity before agreeing to the change. Additionally, if you are asking the bank for some form of relief, you will be able to show them how you determined what your need is, which will give them confidence in management tools and decision making.

Use the model to identify levers.

Once you ave a functioning model, it is time to use it to find ways to preserve or improve your cash position.  We call this “pulling levers” or taking actions that can improve cash flow.

Start by reviewing your income statement to find opportunities that will improve revenue or reduce expenses.  Next, look at your balance sheet.  The accounts on the balance sheet represent opportunities to accelerate cash receipts or slow cash disbursements.  The balance sheet accounts also represent multiple market relationships, every one of which represents an opportunity to renegotiate to improve cash position.

Additionally, consider “off balance sheet” items, such as an equity raise, or a loan from family and friends.  Many companies are applying for government loans, such as the Payroll Protection Program, or grants.  Consider what other sources of capital may exist for your business in your network.

Examples of levers can include:

Cash Receipts

    • Reducing payment terms with customers.
    • Require deposits for new customer orders.
    • Additional cash infusion from owners or investors.
    • Sale of unused or under-utilized assets and equipment.
    • SBA lending or other government assistance.
    • Negotiate increases in collateral advance rates or LOC limits.

Cash Disbursements

    • Negotiate new payment terms with vendors or negotiate payment plans.
    • Reduce direct material order quantities or push deliveries.
    • Reduction of labor (headcount or hours).
    • Renegotiation of contracts or agreements.
    • Deferral or reduction of rent and lease payments.
    • Negotiate deferral of principal or interest payments with the bank.

Communicate your plan to your stakeholders.

Once you have built useful forecasts and identified levers, it is time to communicate the plan to your stakeholders.  What do we mean when we say “stakeholders”?  We mean the Customers, Vendors, Employees, Owners orInvestors, and Community that are a part of your business and share in the success of the business.

Remember that your stakeholders are an essential part of your business.  You want to make sure that they are aware of the company’s plans and its impact on them.

Make sure that the company has a primary point of contact for each stakeholder group.  For example, the CFO should be the primary point of contact for stakeholders like the bank, investors, and CPA firm.  This point of contact would be responsible for gathering needed and relevant information, communicating the company’s plan to stakeholders, and responding to questions from stakeholders.

When communicating your plan and any requests to your bank specifically, describe the following:

    • How did you develop the forecast?
    • What does the forecast show?
    • What steps are YOU taking to improve your liquidity and capital position?
    • What do you need from the bank (how much and for how long)?

Remember that your banker is having a lot of these conversations. Banks are under a lot of stress too. Bring a plan to your bank, don’t expect them to give you one.

This holds for all your stakeholders.  Your customers and your vendors are probably going through the same exercise as you.  Make sure you are clear and considerate in your communication.  Look for win-win solutions. 

Start pulling levers.

Once you have your plan in place and have communicated it to your company’s stakeholders, it is time to start pulling levers.  Make sure that you develop an action list for the levers you are going to pull, including an owner for each action and a due date.  Review this action list on a weekly, if not daily basis.

It is also essential to ensure you are updating your model as you pull the levers.  If you request a customer pay in 15 days and they agree to 25 days, make sure the cash flow forecast reflects that change correctly. 

Review the model weekly and communicate with stakeholders.

Once you have created the forecast, identified levers, communicated the plan to stakeholders, and started pulling levers, it is crucial to maintain this rhythm.  Update the forecast weekly and review the forecast as a team.  Look for changes in the forecast and review the weekly variance report.  This will help you improve the accuracy of the model.

Also, your team should be looking for new levers on a weekly basis.  This is not a one-time event!

This also applies to communication with your stakeholders.  In a time of crisis, the amount of communication with key customers, key vendors, employees, the bank, and ownership should increase.  Continue to update your stakeholders on your plan and progress against the plan.

The COVID-19 crisis has brought numerous challenges to business owners, and leaders, including preserving liquidity.  Taking the steps above will help, but they aren’t always easy.  If you are struggling with any of the steps listed above or would simply like to talk, please reach out. At DWH, we’re here for you, even remotely.

If you found this topic interesting, our strategic partner, JACO Advisory Group published content you may find relevant as well: Navigating Unexpected Business Disruptions by Preserving Liquidity

Tips For Re-Opening Your Business

A close up photo of a DWH employee.

Shelter-in-Place, Stay-at-Home, Essential Workers vs Non-Essential Workers – words which strike fear in the heart of any business owner as you watch your business grind to a halt while the government works to flatten the curve in the COVID-19 pandemic. But as many say, this too shall pass and the economy will slowly start to re-open.

Most likely, there will be regulations associated with re-opening your business which will impact your day to day operations and your supply chain has seen significant disruption. Business owners need to look across all functional areas of their company to ensure a synergistic re-opening plan is developed.  Not everyone is going to make it – you need to be ready. Here are tips to ensure your business is ready to reopen.

  1. Finance

  • Liquidity and Cash Flow – All decisions should be made based upon how they impact your liquidity and cash flow. A 13-week cash flow with information provided by operations is key to evaluating your liquidity, need to access additional capital and ability to perform scenario planning based upon changing variables in your operations. Now is also an opportunity to find ways to turn your balance sheet into cash, negotiate discounts with your suppliers and renegotiate your customer contracts. Watch Adamy Valuation’s Tactical Tuesday webinar on March 31, 2020 for ideas on how to Sustain Your Core Business Processes.
  1. Operations

  • Evaluate your Customer Requirements – Depending upon your business, listen to industry experts about customer demand for product or service or talk to your customers about their needs over the next three to six months and even for the long term. Then keep assessing your customers’ requirements as needs are going to change as consumers make different buying decisions in the post COVID-19 economy.
  • Materials Planning – Evaluate your current inventory levels as well as your supply chains’ ability to provide products and services to your business at the level needed to meet your customer requirements. Your supply chain may struggle due to finances or workforce challenges so carefully evaluate their capabilities as if they were a new supplier to your business. Now is not the time to make assumptions of your supply chains’ capabilities.
  • Scheduling – Develop a schedule for your business to provide the goods or services needed by your customers while keeping in mind your organization needs to remain nimble and flexible as customer demand and supply chain viability shifts and changes. Consider that you may not need all of your employees to return to work at once so you need to determine how, who and when you will bring employees back to work.
  • Focus on Building Flexibility into Your Business – We have yet to see if consumer confidence will return once the economy reopens for business so demand could be erratic in the beginning as your customers find their new normal. In addition, this may not be the last shut down due to the COVID 19 virus so you need to stay on top of all areas of your business. Evaluate the business metrics you review regularly to be sure you are tracking the leading indicators your business needs to make proactive business decisions.
  • Reinforce a LEAN Culture – Throughout the organization look to reduce waste (time and material) and improve operational efficiencies by simplifying or automating processes, redeploying resources or re-configuring your supply chains.
  1. Human Resources

  • Consult Human Resources and Legal Counsel – Work closely with your human resources team and legal counsel to determine employee return to work criteria. Keep in mind that some employees may not be able to return to work or need flexible hours because they or a family member became ill or someone now needs to stay home with their children because they lost daycare or school options. In addition, you need to understand and implement government regulations required in order to reopen. Examples include protocols around sanitizing, physical distancing, use of personal protection equipment and visitor/contractor screening protocols. Your experts can guide you through these requirements. You can refer to DWH’s recent blog post with Barnes and Thorburg for additional information.
  1. Sales & Marketing

  • Focus on Customer Relationships – On an ongoing basis, reach out to your customers to understand their unmet pain points and collaborate with them on solutions. Not everyone is going to make it through this and there will be opportunities to fill customer needs.
  • Improve Sales Processes – Now is the time to improve your sales process including filtering out leads which are low margin or have low potential, focusing on product aligned with your strategic plan, and the evaluation of your win rate to improve your customer’s experience with your business and your ability to accurately forecast your pipeline.
  1. Leadership and Organization

  • We cannot stress this enough. Create a plan, communicate your plan, evaluate your plan, and modify your plan regularly! Your bank will want to see it if you need to ask for assistance but more importantly it will provide leadership and the rest of the organization a guide to move from surviving to thriving.

You are not alone. At DWH, we are here for you, even remotely. Let us know what we can do to help. A lot of our clients have questions about what this all means for them, what options and conditions for support or exemptions apply, what implications are for employees, how to mitigate business value erosion, how to manage communications with banks/creditors/vendors/customers, etc.  Although we don’t have all the answers, we are here to help you.  Please feel free to reach out.

Authored by: Heather Gardner, Senior Director

Connecting in the Age of COVID-19

DWH Team Members

“Dear prospect, I just wanted to let you know I’m thinking of you.”

You’ve only just met once at a conference. A follow-up meeting was going to get scheduled. Then COVID-19 hit. How to follow up with that lead? Sitting in your guest room turned home office, you draft an e-mail. You’ve thought about their business and craft a custom description of your value proposition. You want to add a word of kindness, of showing that you care. You delete it. You delete the whole e-mail. Why would they care about what you’re selling right now? Surely they have other priorities.

In talking with some business owners and commercial leaders over the past weeks, it’s becoming clear that we’re feeling a bit uncertain. Some of us focus on existing customers or on customers who are ‘less affected.’ Some look within our portfolio of products and services and tout its value in the current crisis. We revert to safety. However, we feel it’s not right to be ‘selling’. Most of your leads and prospects are busy homeschooling kids, just like you. Some have been furloughed. They’re concerned with the health of their family and friends, and with the potential implications of this crisis on their financial security. They’re in the same situation.

Now more than ever, consider that ‘Eighty Percent of Success is Just Showing Up.’  To show leadership in times of crisis, look for ways to do that. Just show up. If you have ever been ‘stuck in a bad situation with strangers’, you’ll know that a common threat builds relationships. A conversation about how this crisis is impacting your life and your business can be uncommonly candid and bonding. So pick up the phone, or join that Zoom meeting and turn on that camera.

And if you have anything to offer, no matter how small, bring it without strings attached. It may cost you little but could build a fortune in goodwill. We’ve all heard of companies shifting to making face masks and shields. But everyone can help others in small ways. My consulting company offered a free spreadsheet to help with PPP loan forgiveness calculations and loan applications to anyone – for free (of course). Steelcase offers professional pictures of its collection as a custom background for video conferencing tools, so nobody has to see your basement. Join the helpers. Your prospects and your leads will come to you when this crisis is over.

Authored by: Marcel van der Elst, Senior Director

PPP Forgiveness Discussion with Barnes & Thornburg

Financial Advisor

DWH has worked successfully to qualify clients to receive Paycheck Protection Program Loans from the SBA.  Now that many have received the loan proceeds, we asked Jeremy Reidy ( with Barnes and Thornburg to address the most frequent follow-up questions about the PPP he is receiving from clients. 

PPP Loans & Payroll Considerations

Q: When does the 8-week period for determining the amount eligible for forgiveness begin?

A: The 8-week period starts on the date of the first disbursement of funds. 

Q: What is the formula for determining the amount of any reduction in the amount of forgiveness based on a reduction in the workforce?

A: The numbers of full-time equivalent (“FTE”) employees are to be calculated by pay period. A salaried employee would count for the pay period in which he/she was hired. If the salaried employee was hired on the first day of the pay period, you could divide one by the number of days in the period and count that employee as that pro-rated amount. If there are two pay periods in a month, the average for each pay period is added together to arrive at the average number of FTE employees for the month. Then the months’ averages are added together to come up with the monthly average for the applicable period.

Q: What if we rehire employees after the 8-week period, but before June 30, 2020?

A: Here is an example of how the amount of forgiveness would be determined with respect to employees rehired after the 8-week period has begun (for purposes of the example assume we averaged 96 FTE employees from 1/1/2020 to 2/29/2020 and we average 71 FTE employees during the 8-week period):

[Actual amount of payroll costs incurred and rent, utilities, and mortgage interest paid during 8-week period post-loan (“Eligible Amount”)] multiplied by 71/96.

Or to put another way: Eligible Amount multiplied by 74%

Then to the extent that you rehire any of the differences between 96 and 71 before June 30, 2020, the amount of reduction will be disregarded. So if you rehire 5 FTEs between the end of the 8-week period and June 30, your forgiveness would then be determined by multiplying the Eligible Amount times 76/96.

Q: If we do not use 75% of the proceeds for payroll costs during the 8-week period, do we lose the possibility of any forgiveness?

A: No. The 75% standard is not an all or nothing proposition. Rather, only 25% of the loan forgiveness amount may be attributable to non-payroll costs. The amount eligible to be forgiven is determined by adding the actual payroll costs incurred, and utilities, rent, and mortgage interest paid during the 8-week period. The amount of eligible forgiveness will be reduced until the forgiven amount has not more than 25% attributable to other allowable costs. For example, if you spent $100,000 during the 8-week period, but only $50,000 was spent on payroll costs, then only about $67,000 would be forgiven.

Q: Does the PPP impose any restrictions on a PPP recipient’s ability to reduce its workforce or employee compensation?

A: No. Reductions in workforce and compensation may result in a reduction of the amount forgiven, but there are no restrictions on the ability to reduce workforce or compensation.

Q: My business has received a PPP loan, but still has a significant cash burn in the coming months. What payroll reduction options do we have, and what are the trade-offs between these options? Will we maintain loan forgiveness eligibility?

A: If you still need to mitigate cash burn, you have several options that will keep you eligible for at least some PPP loan forgiveness:

To the extent you reduce the workforce through a temporary layoff, furlough, or reduced hours, the amount you will be eligible to have forgiven will decrease. Remember, the amount you will be eligible to have forgiven is determined by your actual costs incurred and paid during the 8-week period beginning on the date funds are received. The amount of forgiveness will also be reduced to the extent your workforce during the 8-week period is lower than your workforce during either the period from 2/15/2019 through 6/30/2019 or from 1/1/2020 through 2/29/2020. With respect to reduced compensation, the amount of forgiveness will be reduced by the amount that any employee’s compensation was reduced in excess of 25% from the first quarter of 2020 to the 8-week period. If an employee is laid off, the employee can collect unemployment. The employer can continue to pay its portion of health insurance premiums and other benefits, all of which can be counted as “payroll costs” for purposes of calculating the amount eligible for forgiveness.

Q: If I have excess PPP loan funds available, how do I best utilize these funds to maximize loan forgiveness?

A: If your intent is to maximize loan forgiveness, you may pay bonuses, increase the workforce, or increase compensation in order to take full advantage of forgiveness. One possibility is to provide incentive pay for workers to come back while there is still some risk caused by the pandemic. The incentive pay would be forgivable. The amount eligible to be forgiven is determined by adding your actual payroll costs, utilities, rent, and mortgage interest during the eight weeks beginning on the date of the first disbursement of funds. The forgivable amount can be reduced by a reduction in wages under certain circumstances, but there is nothing the prohibits or penalizes you for wage increases.

Q: Do we still qualify, and can we get forgiveness if we laid off all of our hourly employees even if they are currently collecting unemployment benefits and waiting to be called back to work. 

A: You do not have to be paying all of your employee’s wages in order to qualify for the loan. One of the main purposes of the loan, though, is to encourage businesses to put their employees back to work. The number of employees you bring back will affect the amount you are entitled to have forgiven.

Q: We do not know what our production volumes will look like as things slowly return to normal. How can I be most effective in rehiring labor through the volatility?

A: Bring back your workforce in stages. You can start to bring some employees back on the date you receive funds, then see how things progress before bringing more back. Remember, the terms of the unforgiven portion of the loan are incredible: two years, 1%, unsecured, and with no personal guarantees.


Please note, a free PPP Loan Forgiveness Calculator can be found “HERE” through the DWH website.

These Q&As are provided for informational purposes only and are not intended to provide legal advice; please consult with legal counsel for advice related to your specific circumstances.

Tribal COVID—19 Advice: Surviving and Thriving the Downturn

Tribal Economic Development

Like any government, a tribal government’s sole purpose is to provide essential services to its members to ensure the preservation of their way of life.  Unlike most governments, tribal governments do this through multiple funding sources, which include public funding (grants) and private enterprise (Casino’s, Economic Development Companies, and Natural Resources).  Given the broad impact the COVID crisis has had on these sources, DWH has compiled a list of considerations that tribal governments should address during these turbulent times.


While communication with all stakeholders is always important (investors, creditors, customers, vendors, and employees), during this crisis, tribal governments need to first and foremost establish a consistent and reliable communication method with its membership.  Communication should include:

    • The actions the tribal government is taking to mitigate the spread of the COVID virus and any actions the tribe recommends members take.
    • The current state of the tribe and its finances, detailing risks and potential pressure points.
    • Outlining the actions that will need to be taken to support key Tribal funding sources (such as a casino operation) and the timing of those actions.
    • Details on relief efforts, programs, and stimulus monies individual Tribal members will qualify for (including how to go about accessing those funds).
    • Actions the tribe is taking to try and reduce the impact on daily life and key programs.
    • Outline any reductions in non-essential government spending and where cuts are likely.
    • How and where access to necessary health care can be obtained.


All businesses should have a COVID 19 response leadership team comprised of executive leadership, Finance, Operations, and Human Resources.  Tribal governments should do the same.  This “cross-functional” team should be meeting daily to discuss:

    • Communication with key stakeholders on the current state of the tribal government, its members, and any investment entities.
    • Review of cash flow, including all inflows from grants and changes to grant funds usage based on recent updates from the Office of Management and Budget (OMB).
    • Review alternate funding sources, including available lines of credit, SBA Payroll Protection Program, and other grants or guaranteed loans.
    • Updates on employment needs, including updates on programs for laid-off employees and communication with those employees about the potential for rehire.
    • A review of cash flow projections, the status of any Accounts Receivable, and necessary payments to key vendors.
    • Communication with and analysis of suppliers & vendors, communication with, and analysis of end customers.
    • All tribal investments (especially casino operations) should be assessing potential recovery levels of the operations and developing plans for reopening once the pandemic is under control.


Surviving this crisis will require effective management of the tribe’s balance sheet.  Tribes will also need to maintain liquidity to ensure that necessary payments are being made and services are maintained.  Tribes also need to ensure there is enough capital remaining to restart any suspended operations once things begin to return to “normal.”

Tribal entities can take many actions besides laying off members of the workforce, suspending services, and shuttering operations to preserve liquidity.  The recently passed CARES Act outlined several programs for tribal businesses and tribal governments.  Additionally, there are ways tribes can work with their bank to modify existing credit facilities, provided the tribe can demonstrate a need and outline a plan on how the requested modifications will help ensure survival.

CARES Act – Apply for the SBA Payroll Protection Program – 500 or fewer employees

As part of the CARES Act, the SBA is authorized to provide $350 billion in forgivable loans to help support small businesses through this cycle.

    • These loans are meant to cover payroll, rent, utilities, and interest payments for up to 8 weeks. Up to 100% of the loan could be forgiven if the borrower meets specific guidelines (there are limitations for non-payroll expenses and timing on the use of funds).
    • Applications began with most Banks and lenders on Friday, April 3, and it is recommended that borrowers work with their existing bank to apply and submit applications as soon as possible.
    • Tribal Entities are eligible for the program; however, issues still remain and clarification is needed from the SBA on:
      • Are gaming entities eligible? They are not eligible under the traditional SBA 7(a) program.
      • How should tribally owned entities who do not have a separate EIN (operating as a Tribal Authority or d/b/a) apply for multiple entities? If the tribal entity is chartered under a State or Tribal UCC, or a Section 17 entity, then this concern will not apply.
      • It is highly recommended that tribes work with their legal counsel and CPA’s to determine how to proceed with each unique situation.
    • Program is limited to companies with less than 500 employees; however, tribal entities have been excluded from the Affiliation calculations so each individual tribal business should be able to apply on its own without having to aggregate employee counts with other tribal entities.

CARES Act – Loan Guarantee Program – 500 to 10,000 employees

As part of the CARES Act, the Federal Government approved a $500 billion Federal Loan Guarantee program through the Federal Reserve Board (FRB).

    • $46 billion of these funds are set aside for specific industries such as airlines. The remainder will be open to all industries as long as the companies that are applying meet the requirements.
    • Tribal Casinos and Businesses should be eligible for these loans; however, the Treasury has not listed the full requirements or rules for this program at this time.
    • The processing of these guarantee programs has not been defined either, but clarification is expected in coming days. The FRB was authorized to hire financial intermediaries to operate the newly approved facilities (likely through the existing banking system), which will ultimately define the process for this program.
    • Like the Payroll Protection Act, these guarantees are intended to back loans to keep employees and operations functioning as they were before the COVID 19 crisis. UNLIKE PPP, these loans will NOT be eligible for forgiveness.
    • Like the TARP and HARP programs before it, this program will also come with restrictions, not all of which apply to Tribally owned businesses:
      • Limits a corporate entity’s ability to declare dividends or repurchase stock and permits the government to take warrants or other securities that will eventually be repaid (not likely to apply to tribally owned entities).
      • Companies must make a good faith certification that they will maintain 90% of their current workforce and, if applicable, restore 90% of their workforce as it existed on February 1, 2020.
      • Recipients that are listed on national exchanges will also be restricted from paying dividends to common shareholders and from abrogating collective bargaining agreements (seek input from legal counsel regarding casino distributions to tribal government).
      • To qualify, recipients must certify that they require the loan due to the uncertainty of economic conditions.

Work with Creditors

Casino operations and other tribally owned businesses need to be in constant, proactive communication with their banks and their other creditors (  Each business owned by the tribe needs a detailed plan that includes:

    • A detailed rolling 13-week cash flow model,
    • A list of actions being taken to reduce cash disbursements and increase cash receipts,
    • Any planned injections of capital,
    • Any programs, such as SBA lending that are being pursued,
    • Calculations of required capital to start-up operations once the operations are permitted to reopen,
    • And an estimated ramp-up period or analysis of the potential reduction in revenues based on coronavirus outbreaks (will business return to normal or will it come back at a lower run rate for an extended time).

The plan should be created before requesting any modifications to loan agreements, changes to payment terms, or increases in availability.


The CARES Act authorized many different programs to assist tribal governments.  We have included a list of the named programs and our current understanding of the mechanics of each program.  We strongly encourage tribal governments to work with their legal teams and government agencies (such as BIA and HIS) to assess these programs and their applicability to each tribe.  If needed, DWH can provide references to our network of trusted partners.

    • Unemployment and FMLA benefits were increased, and certain tax credits were provided to offset the costs to companies. Some of these tax credits may not apply to tribes since they are not taxable entities.
    • Of the $150 billion in relief for local governments and municipalities, $8 billion has been carved out for tribal governments.  The funds can be used for any necessary expenses between March 1, 2020, and December 30, 2020, as long as the expenses are related to the COVID 19 emergency and not already planned in the tribes’ approved budget for the current year.
      • The dissemination method for these funds has not been determined by the Treasury at this point. The Treasury is still taking comments and input from tribes at this point in determining the methodology that it will ultimately use.  It is highly recommended that tribes work with their legal and lobby counsel to relay suggestions or concerns to the Treasury as quickly as possible.
    • $1.4 billion to was given to the Indian Health Service (HIS) and Bureau of Indian Affairs (BIA) with $850 million reserved to address the direct needs of tribes.
      • The Emergency Appropriations for Coronavirus Health Response and Agency Operations, included in the Stimulus Act, includes an additional $1 billion for the IHS and $450 million for the Bureau of Indian Affairs BIA.
      • At least $450 million of the IHS appropriation shall be distributed to IHS direct-service health programs. The funds must be used to prevent, prepare for, and respond to COVID-19, including for public health support, electronic health record modernization, telehealth, and other information technology upgrades, health services provided by Purchased/Referred Care programs, Catastrophic Health Emergency Fund reimbursements, and other activities to protect the safety of patients and health program staff.
      • At least $400 million of the BIA appropriation must be made available to meet the direct needs of tribes. The funds must be used to prevent, prepare for, and respond to COVID-19, including public safety and justice programs, deep cleaning of facilities, purchase of personal protective equipment, purchase of information technology to improve teleworking capability, welfare assistance and social services programs (including assistance to individuals), and assistance to tribal governments. Funds distributed from the BIA appropriation shall not be included in the statutory maximum for welfare assistance funds.
    • Other tribal specific stimulus actions:
      • The stimulus package also provides for an additional $125 million in funding for tribes from the Centers for Disease Control, $300 million in housing grants, $100 million for food distribution programs, $15 million for substance abuse and mental health services, and increased eligibility of tribal businesses for small business loans. Tribal schools are eligible for waivers of statutory and regulatory provisions in the Elementary and Secondary Education Act of 1965 and the General Education Provisions Act.

As tribal groups navigate the COVID-19 crisis, remember that there are programs available.  If you or your tribe needs assistance, please feel free to reach out to DWH.  As a tribally owned business, we support and understand the needs of various tribal groups.

DWH | For the Life of Your Business


COVID-19 Employment Law Discussion with Barnes & Thornburg

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Nearly four weeks ago, the Families First Coronavirus Response Act was passed. Questions remain despite guidance from the Department of Labor: and

DWH asked Don Lawless  ( with Barnes and Thornburg to address the issues now being raised by employers about the FFCRA and managing the current workforce dynamics.

FFCRA and Related COVID-19 Employment Issues

Q: As a starting point, please provide an overview of the Families First Coronavirus Response Act and benefits it extends to employees?

A:  The simplest point of entry to obtain an overview of the FFCRA is to review the posting that covered employers needed to put up on April 1:

In the private sector, the law applies to employers with fewer than 500 employees.  It remains in effect until December 31, 2020. It provides for 80 hours of emergency paid sick leave for covered reasons.  It provides up to 12 weeks of expanded FMLA (the last ten weeks paid) if the employee is unable to telework because he or she must care for a child.  Employers are eligible for a fully refundable tax credit of 100% of the paid leave.

Q:  How and when do private-sector employers measure their employee count (to determine if they have fewer than 500 employees)?

A:  The employer must count full-time and part-time employees employed within the U.S. at the time the employee would take the leave.  So the count is taken at each time an employee takes leave. The big issue now is falling below the 500 threshold due to layoffs. The temporary regulations state at 29 CFR Section 826.40(a)(1)(iii) that the threshold count does not include workers who have been laid off or furloughed and have not subsequently been reemployed.  No one saw the exclusion of laid of employees from the count. We have clients with many employees on layoff who now have active workforces at fewer than 500 based on the counting rule adopted in the regulations. This language was a surprise and seems counter to Congress’s intent in targeting the FFCRA to smaller employers.

Q: What legal requirement(s) do I have as an employer to inform and educate employees regarding paid leave benefits under the FFCRA?

A:  The only required communication is the mandated posting, which can be found here:  Many employers are taking a “sufficient notice” approach.  Namely, if an employee provides sufficient facts that indicate he or she may be eligible for paid leave, the employer engages a discussion to determine if the employee is eligible.  Some clients have developed policy statements about the FFCRA, too.

Q: Covered employers want to provide FFCRA paid time off to employees who are entitled to it, but how do they fairly administer the Act?

A: FFCRA Q&A No. 16 lists the information an employee must provide and adds:  “In addition to the above information, you must also provide to your employer written documentation in support of your paid sick leave as specified in applicable IRS forms, instructions, and information.”  IRS guidance requires “written support” for the FFCRA covered reason for the leave.

Q: As an employer, how does FFCRA impact my ability to furlough or temporarily lay off employees? 

A: The FFCRA does not limit an employer’s ability to temporarily lay off workers or temporarily suspend operations.  The FFCRA Q&As at nos. 25, 26, and 27 confirm that emergency paid sick leave and expanded FMLA entitlement ends with a lay off; the employee then seeks unemployment.  Layoffs need to be supported by operational need, not the desire to avoid providing paid leave under the FFCRA.

Q: A big concern of employers is whether they will be able to attract employees back to work post coronavirus while they are receiving expanded unemployment benefits. Do you believe this will be an issue, and if so, how can employers mitigate this risk?

A: If an employee is recalled to work that cannot be performed remotely and that work is allowable under the stay-at-home order, they are no longer eligible for unemployment benefits.  Employers need to lead with credible communication about why the work is essential critical infrastructure work and confirm the steps taken in compliance with all CDC, OSHA, and additional government requirements to assure the workplace is as safe as reasonably possible.  Practically, employees faced with the termination of health benefits or their reinstatement will likely return to work.

Q: We hear in the news that there is a resurgence of unions, or employees seeking to unionize, as a result of the working conditions under COVID-19. For smaller employers in the region, will there be a similar effect?

A:  Smaller employers are most at-risk, statistically, for a union organizing effort.  The primary risk smaller employers face as a result of the COVID-19 crisis relates to the right of employees to engage in protected concerted activity under the federal National Labor Relations Act.  Employees have a right to solicit co-workers and come together to protest or object to terms and conditions of employment – including walking off the job. This right is broadly construed and does not have to relate to an effort to organize a union.  Employees’ objections to their employer’s response to the COVID-19 crisis can fit within this right. The limits are narrowly applied – such as individual gripes and threats. Employees are provided with a fair amount of leeway. Employers cannot discipline or discharge employees for engaging in such protected conduct; they can be asked to leave the workplace if they refuse to work and be advised that they may be permanently replaced.

Q: Is there anything else employers should be aware of regarding employment law or the effects of new federal/state programs?

A: Employers need to make sure their benefit plans allow for the extension of health benefits to laid-off workers (often a plan amendment is required).  There is also the issue of WARN Act compliance if layoffs now look to be indefinite vs. temporary.

As it becomes more available, we also expect that more employers will consider COVID-19 employee testing to determine if it is safe for employees to return to work or to disqualify them for work.

The EEOC issued updated COVID-19 medical examination guidance on April 17:

It speaks in terms of asking employee COVID-19 related symptom questions and taking body temperature, and not employer administration of a COVID-19 test, which would be a regulated medical examination under the ADA.  Watch for developments in this area.

Q: Don, it has been our experience that companies often wait too long to contact a labor attorney. Are there critical points where you suggest company leadership engages a labor attorney?

A: Qualified labor and employment counsel can add the most value before a legal claim develops.  So get us involved in the up-front strategy decisions before the facts are finalized.  If one claim can be avoided, the cost of legal counsel and the disruption to the organization is substantially reduced.

These Q&As are provided for informational purposes only and are not intended to provide legal advice; please consult with legal counsel for advice related to your specific circumstances.

PPP Loan Forgiveness Calculator – SBA Lending

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Please provide your name and email below to download the DWH PPP Loan Forgiveness Calculator. The excel spreadsheet was built to help businesses manage through the SBA’s Paycheck Protection Program (PPP). This document is to be shared with anyone who needs a simple tool, and walk-through instructions, for calculating loan forgiveness. DWH staff is available for further support.

The rules around forgiveness of PPP loans are changing. We will continue to update the tool as needed to address changes in legislation. Please check back for updates. (Last File Update Rev 4.0 on 8/7/20 at 1pm).

The download will begin automatically once you click submit. If you have any questions on the spreadsheet or the program, please feel free to contact Jeremy Cosby, Senior Director.

Check out our webinar for extra discussion on navigating the PPP program as a small business owner, and read the federal PPP guidelines on the SBA website.