Companies are moving to ensure their own liquidity. For example, in the last week H&R Block drew on its entire $2-billion revolving credit facility, which it previously had not touched. The company said it is also evaluating all discretionary expenditures. And it is offering absence benefits for the first time.for all seasonal employees, including tax professionals and other hourly workers.
Block has also stopped repurchasing its own shares, a move also taken by Sage, which had initiated a share buy-back program on March 12.
In terms of helping employees, Automatic Data Processing committed an estimated $51 million to provide each worker with $1,000, or the equivalent based average wage parity in each country. That amount will be paid in April to each associate of ADP and its subsidiaries, excluding corporate officers.
On the federal government side, the Small Business Administration is making it easier for states to receive disaster assistance. They are now only required to show at least small business have subsidiary substantial economic injury, no matter where they are located. In the past, states or territories had to certify a small business in each declared state or parish. Disaster assistance loans are also now available statewide, which applies to declaration related to coronavirus. Previously, loans were available within counties identified as disaster areas.
Payroll companies are pointing to a number of tools that aren’t new, but are being utilized to speed access to cash. In a post on his company’s website, Paychex CEO Martin Mucci noted this month because of cashflow users “we’re seeing an uptick in the use of solutions that enable the digital flow of money and offer quick access to cash when needed.”
Those tools include direct deposit, pay-on-demand, paycard and same-day ACH. Mucci also cited FinFit, a financial wellness tool which also offers short-term employee loans for emergencies and unexpected events. He also noted the ability of 401(k) participants to drawn on balances to cover emergency expenses.
Besides working with GoFundMe to help businesses raise money, Intuit is providing relief to borrowers who use QuickBooks Capital. Customers can receive up to an eight-week deferral on loan payments with no interest charged.
Intuit also provides access to cash the same day via QuickBooks Instant Deposit, which is available to QuickBooks Payments customers. The company says it will soon launch a free version “that will save customers up to $3 million in fees and provide them with access to a total of $300 million of their payments funds instantly.”