Tips to Managing Your Cash in a Crisis

I am hearing people say cash is trash…

Cash is not TRASH. Cash is KING!

Cash is the one beautiful part of business that our customers understand. Our customers realize that cash is King.

We look at business in an old school fashion. We clearly recognize that the concept of cash being trash is madness and cash can only be King. So let’s get into it for a little bit. We’re talking about our clients, our dealers, and our vendors here. In an effort to help everybody get through this Corona madness, Corona Virus will prove to not be as big as everyone thought.

If we can look at the news a little bit, we recognize that, Dr. Fauci and even our President, Donald Trump, has come out and said that in the early stages of coronavirus that there will be between 100,000 and 250,000 deaths of coronavirus, and as of yesterday we were at 27,000 deaths. I believe that some of those deaths are being over reported.

Here’s my point. I’m not discounting that the coronavirus isn’t real. It is real. However, the health impact of the Corona Virus is going to prove out to be not as much as everybody thought.

Here is what is going to be more impacted than what everybody thought, and it’s the recession.

There is no question that our economy is struggling and therefore our businesses are struggling, and I believe that it’s going to continue for a little while. I want to come on today and talk specifically about why cash is not trash, that cash is King and how we can go into our businesses right now in find more cash.

We all need more cash and we need it now. Right now. I have 4 tips that I want to give to our clients, our vendors, and our dealers.

Learn how to find cash, utilize cash, so we can trust it, then be able to survive and eventually deploy the cash to thrive.

Tip #1 Go to your bookkeeper, your controller, your CPA, and you need to pull your updated balance sheet statements consists of two parts.

  • The first is the balance sheet.
  • The second is the income statement.

Everyone needs to pull your balance sheet right now and you need to look at it in two fashions.

  • You need to look at your assets.
  • You need to compare them to your liabilities to determine what your cash position is.

Quick Ratio

The technical term of this analysis is called a Quick Ratio and this is used when you’re figuring out what your current assets are over your current liabilities.

If you do that exercise, if you take your current assets, everything you own that could be liquidated in 12 months and you overlay it against your current liabilities, everything that you owe out over the next 12 months, that’s your Quick Ratio and it will help you determine what your cash position is.

Everyone needs to do that right now.

You must figure out what your cash position is off of your balance sheet, your current liability, current assets over your current liabilities, everything you own that you could liquidate in 12 months versus everything you owe over the next 12 months.

That ratio has to be done now. The math has to be done and the result of that begins to tell you what your cash position is.

Account Receivables

Part of current assets is your account receivables. You must figure out what your accounts receivable position is.

You have to ask a few questions on your accounts receivable. This is work you performed, invoices that you’ve issued, and you’re waiting to collect this money.

You have to ask yourself, are they real? How much of your accounts receivable, which is part of your current assets are receivables? How many of those clients are actually going to pay you?

Then you have to get on the phone with all of those clients and you have to strike deals.

Look, I believe cash is more valuable than ever right now for the next 30, 60, 90 days as we’re moving through this Corona virus mess and the real economic fallout that it’s caused.

We’ve got to get our hands on more cash. So look at your accounts receivables.

After you’ve pulled your balance sheet, you’ve done your quick ratio, your current assets over your current liabilities, and begin to strike deals.

Tips #2 Call every one of the people that was on your accounts food bill list and offer them an opportunity to get paid.

Can you pay me today? Can you pay me by credit card? Can you send me a wire transfer? Can I come and pick up a check? If I discounted your bill by 10% would you be able to pay me today?

How can you collect on your accounts receivable so you can turn the receivable, the paper invoice into real cash in the bank?

I want you to also think about the opportunity to factor your invoices. Could you engage with a factoring company right now to go ahead and start to collect your receivables faster from a factory company?

Tip #3 Get as much cash as you possibly can right now. Cash is King.

I want you to apply for the government stimulus programs that we did the live video a week or so ago, talking about the programs, the PPP and the EIDL.

We’ve all seen the news that the PPP today has run out of money.

I don’t believe that’s the case. I believe that government will issue more money to small businesses. I think they will put in another $300 billion that will take it too close to $750 billion and I believe more money will be coming. Make sure you apply for the government stimulus programs, the PPP and the EIDL program.

Tip #4 Try to get your hands-on cash and survive the economic downturn that we are in, not that’s coming, we’re in it right now.

You have to think about downsizing your fleet.

Can you sell older pieces of equipment? I know you like that old piece because you know old yellers in the yard and everybody knows how to drive old yeller and she starts every time you turn the key, but you may have 50 grand or 80 grand or a hundred grand sitting in old yeller in the parking lot and it might be time to unload her.

You may need to sell paid for equipment to collect the income, the possibility of real cash that’s sitting in dead cash right now.

I know our customers, if we’ve been financing, trucking and towing and construction companies for the last 25 years, we all think the same. I know how we think and that that cash is gold man. That’s as liquid gold out there and old yeller in the parking lot. I get it, but today is when we need the gold, that old yeller.

Think about selling some of your equipment. Think about rightsizing the fleet. Sell one or two pieces of paid for equipment to get yourself some cash and then analyze with your vendor or your dealer what your traded opportunities are.

You may have 10 trucks in the fleet right now and you may be able to trade five of those trucks in and right size the fleet. You just may have some overcapacity. If you traded in 10 trucks and you got yourself 8 trucks and you eliminated the debt service on two trucks, it might be the time and the smart move to do it right now.

So, I want you to think about downsizing the fleet, liquidating some paid for equipment or even old yeller in a parking lot and turn that stuff into cash.

Bonus Tips on How to Make Cash KING!

Bonus Tips #1: You need to cut expenses to the bone right now.

You’ve got to cut staff and overhead. I want you to look at the company credit card and cut out all spending on the company credit card. You might need it for fuel probably and maybe office supplies and a few other things, but all those little incidentals that you were doing, the office supply bill, way too high.

Analyze your company credit card and cut your expenses to the bone. Go to your vendors and see if you can renegotiate some terms.

Look, I just mentioned on your accounts receivable that maybe you have to offer a discount to go ahead and get your money paid on it. The same thing might apply on the other side, which is what if you went to your vendors and ask them for a discount. If you were able to pay the bill now and you might pick up 10, 20 or 30% discount if you did that. Yes, it hurts your cash position now, but you’re making money every time you pay with a discount.

Bonus tip #2: You’ve got to reconcile your bank statements and you’ve got to reconcile them now.

I guarantee, you have expenses on your bank statement that in the good times you just didn’t spend a lot of time thinking about or looking into or analyzing. Heck, maybe you haven’t even looked at your bank statement a long time or you’ve got somebody else in the office doing your bank statement reconciling. You need to reconcile your bank statements.

Now, what are the recurring charges that are happening on that every month that you don’t even worry about the $50 bucks here, the $100 bucks here, the $200 bucks here, that adds up, but it might find yourself a couple thousand bucks every single month to reconcile the bank statements and the last concept that I have I want to give you a last piece of advice on this one.

You can survive by over-correcting and cutting deep on your expenses, but you can die by under-correcting. In other words, if you over-correct by rightsizing the fleet, cut your expenses to the bone, adjust your staff then you might live to fight another day.

Conversely, if you don’t, your business could die.

You chance of going out of business by under-correcting, is much greater than going out of business by over-correcting. Over-correcting is hard. It’s not fun, it’s uncomfortable. It causes pain to other people, but you might save your business and you might be able to hire those people back. It helps to ensure your survivability through the next 30, 60, or 90 days.

We are going to have a lot of businesses that fall into hard times and we’re starting to all feel it and see it now. So how do we fix it? We have the guts and the courage to over-correct and cutting our expenses to conserve and bring in cash now to prevent ourselves from under correcting and potentially even putting us out of business down the road.

Commercial Fleet Budget Builder Tool

We are wide open and we are financing equipment. We’re not as busy as we were 30 days ago, but we are wide open, and we are doing deals and we are docking transactions and we are funding people in the transportation space who want to buy newer used trucks or trailers or equipment.

If you’re in the market, let’s talk, go to CFF nationwide.com call our office (469) 281-2962 and let’s talk about what you’re thinking about doing.

On our website, go to the upper right-hand corner of our website and click Budget Builder and use that free quick and easy tool that we built so many years ago to help you figure out if you can make money off this piece of equipment. What if you traded in your equipment? What if you went for a new account?

The key topic for today is Cash is not TRASH. Cash is KING! We know this. You think like I do, right?

Conserve cash, be frugal, live to fight another day, and you live to fight another day by conserving your cash, by finding new cash, by going out and getting it, by monitoring it, and then having the courage to make the potential cuts necessary even though they are hard and they feel as though they might be an overcorrection in order to prevent under correcting.

You can live when you over-correct, but you might die in the business world if you under-correct.

I hope you found it beneficial. It’s my pleasure to come to you again. If you’ve got financing needs, call us at the Commercial Fleet. We’re wide open for business. Go to the website, cffnationwide.com we’re here to help you. We’re here to talk to you. We’re here to work with you, but most importantly, get your hands on as much cash as you possibly can right now by putting in some of the strategies that we went through today.

I wish everybody health and I wish you prosperity and hashtag drive safe.

We’ll see you all down the road.


SBA Loan ResourcesResources – April 20, 2020 

I’m going to put a PDF for everybody to see and read on your own the summary that we’ve come up with.

I will put a link to the application in which you can get started on applying for the PPP loan. Now let’s move to the next loan. Under the Care Acts called the Economic Injury Disaster Loan. It is referred to as the EIDL loan.

Look Up ANY SBA Document form here: https://www.sba.gov/document/

Disaster Loan Online Application and details: https://disasterloan.sba.gov/ela/

Visit the SBA website for more information: https://www.sba.gov/

SBA: PPP PDF FOR DIRECT APP

SBA: EIDL DISASTER LOAN DIRECT APP

Online Application: https://covid19relief.sba.gov/#/

SBA GOV: Applying for SBA Disaster Loans (EIDL) – PDF Packet

Watch This Weeks MTIM: “Cash is Not TRASH. Cash is KING!”
President of CFF, Matt Manero, Will be going into detail about how to find cash, utilize cash, so we can trust it, then be able to survive and eventually deploy the cash to thrive.

About Commercial Fleet Financing, Inc.: At Commercial Fleet Financing (CFF), our pros have given smart advice to fleet owners and owner-operators in the transportation, moving, towing or construction industries for more than two decades. With CFF, finding the right financing solutions is a phone call away and most borrowers secure commercial vehicle financing with ease. To talk directly with one of our finance pros and get started with a credit approval in as little as two hours.
CFF’s phone number is (469) 281-2962.