COVID-19 ICMAD Members Helping Members Webinar Series:

Loans & Sources of Funding

April 16, 2020

Terms of use for ICMAD open forum discussions

To support its members during the COVID-19 crisis ICMAD is providing an open forum where members can discuss challenges they are facing in their businesses and ask questions and share possible solutions with other members on the challenges they are experiencing in their respective businesses as a result of the crisis, and to share information on topics of mutual interest, such as seeking SBA loans. Because many of our members are competitors we want to make sure that in the interests of trying to help each other there is not an inadvertent violation of federal or state anti- trust laws. When sharing information on the site there should be no discussion or agreements made with respect to product pricing or pricing strategies and no discussions or agreement should be made between competitors that would in any way reduce competition in any market or market segment. As for instance two competitors agreeing to restrict their marketing and sales activity to enable each of the competitors to gain greater market power in their market segments or in a particular geographical area.

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Agenda:• Introduction• Support for U.S. Business & Capitalization Approaches• How to Survive COVID-19: Loans & Sources of Funding• The Changing Face of Beauty: Implications of COVID-19• Open Forum Discussion• Conclusions

ICMAD COVID-19 Webinar: Support for US Businesses & Capitalization ApproachesApril 2020

Ryan BeiserDenver Regional PresidentPNC Bank

Ryan Beiser Biography

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Actions Being Taken to Support U.S. Businesses

State and Local COVID-19 Relief Examples

State Program Summary

MarylandMaryland has authorized $130 million in loan and grant funding for small businesses and

manufacturers that have been negatively impacted by the Coronavirus (COVID-19).

New MexicoNew Mexico State Investment Council will fund a $100 million New Mexico Recovery Fund to

provide discounted, short-term loans to businesses.

Utah

Utah Leads Together Small Business Bridge Loan program offers a bridge loan to the state’s small

businesses with 50 or fewer employees. Loan amounts range from $5,000 to $20,000 with 0%

interest for up to a 60-month period, cannot exceed three months of demonstrated operating

expenses and payments are deferred for 12 months.

Federal Legislation and Direct Actions by the Fed and Treasury Dept.

Program Most Applicable To Overview Other Notes

Paycheck Protection

Program

Businesses <500

EmployeesForgivable Loans

• Loan amount: Lesser of $10mm or 2.5x avg.

monthly payroll

• Interest: 1.00%

• No collateral / personal guarantees

Economic Injury

Disaster Loan

Businesses <500

Employees

Low Interest Loans /

Grants

• Loan amount: Up to $2mm

• Interest: 3.75% for SMB / 2.75% non-profits

• Guarantees for loan >200k

• 10k grants not required to be repaid if denied

EIDL loan

Main Street Lending

Facilities

Businesses <10k

employees OR <$2.5bn

Revenue

Loans with Gov’t Risk

Sharing

• Fed Special Purpose Vehicle to purchase 95%

participation in facilities, lenders retain 5%

• Term: 4 years

• Interest: SOFR + 250-400bps

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Capitalization Approaches

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Debt / Lease Restructuring

Various Forms of Capital

Supply Chain Best Practices To Unlock Liquidity

▪ Increase in requests for the following items: Switch to interest only, reduction in interest rate, deferring principal & interest payments, releasing escrow funds

▪ Internal approval based on: Understanding the effect COVID-19 has on the borrower, what actions taken by the borrower to counter COVID effect, what modifications are needed and why are they appropriate

▪ Example customer steps: Taking part in government support programs, salary reduction for owner, elimination of discretionary distributions for 2020, changes to supplier payment terms, staff reduction as appropriate

▪ Bank debt structural changes: AR factoring, supply chain financing, transition to asset based structure

▪ Landlord negotiation: Lease payment deferral / lease structure changes

▪ Equity: Management contribution, friends & family, seed / angel capital, venture capital, private equity

▪ Debt: Senior bank debt (revolvers / term loans), subordinated or mezzanine debt

▪ Other: Grants

▪ Create critical vendor list and understand their liquidity challenges/strengths and ask them about financial health and lead time changes

▪ Identify alternate suppliers/customers in adjacent industries (Ex. Janitorial services focusing on grocery / healthcare industry in time of increased need)

▪ Pay vendors early or pay suppliers’ vendors directly, build safety stock, redirect company owned assets to their key vendors if their network is a bottleneck

▪ Cash is king: Pulling levers within working capital changes to free up cash

Other Support Groups ▪ Leverage support of accountants, lawyers, trade associations, pro bono support etc.

▪ Ernst & Young’s links on supply chain best practices during disruptive events

− Webcast replay: Responding to COVID-19: What’s next for supply chains

− COVID-19: How to forge a supply chain that withstands severe shocks Videos: 1) How global supply chains are impacted by COVID-19 and 2) Five capabilities needed for supply chain resilience

− COVID-19: how to build supply chains resilient to disruption Video: Why supply chains struggle with disruptive events

− Video: Steps enterprises should take in building resilient supply chains

▪ PNC Bank CARES Act Resources

− See attachments

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Appendix: Helpful links

RelentlessClient

Advocates

Creative Positioning Approach

Bulge Bracket

Execution

Global Reach

Diversified Industry

Expertise

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QUESTIONS? COMMENTS? CONCERNS?

Contact Information:

ICMAD: info@icmad.org

COVID-19 Survey: www.icmad.org