B8 N THE NEW YORK TIMES, SATURDAY, APRIL 4, 2020Personal Finance
Meganne Wecker got a sense in Janu-
ary of the economic blow coming to her
family’s furniture business from her
suppliers in China.
Ms. Wecker, the president of Skyline
Furniture, a 74-year-old manufacturer
in the Chicago suburbs, heard from her
partners in China about the economic
devastation caused by the coronavirus
outbreak. Skyline, which has about $50
million in annual revenue, sells to re-
tailers like Wayfair and Target, and the
supply-chain loss could deliver a huge
blow.
She prepared herself for the worst,
but it was still gut- wrenching when she
and her father, Ted Wecker, Skyline’s
chief executive, had to shut down the
company as the U.S. economy came to
a lurching halt. They decided in mid-
March to close both factories and stop
paying themselves, but they continued
to pay all 300 employees for two weeks.
But time is running short, and Ms.
Wecker, like other small-business own-
ers, must determine how to keep her
company afloat as stores and restau-
rants are shuttered, manufacturing
comes to a standstill and people are
told to stay home. Some choices — pay
cuts, furloughs, layoffs — could seri-
ously harm employees who have
worked for them for years.
The damage is already becoming
apparent: More than 6.6 million people
filed new claims for unemployment
benefits last week, the Labor Depart-
ment said Thursday, surpassing the
record 3.28 million claims from the
week before.
For Skyline, it’s unclear when the
State of Illinois will let it reopen. “Our
top two priorities were the health and
safety of our employees and how we
are going to come out of this with a
business that’s still operating and in-
tact,” Ms. Wecker said. “We’re going to
try to understand all that is available
with packages and loans.”
She is hopeful that she can get fed-
eral funds through a relief effort known
as the paycheck protection program to
pay most of her employees this month.
Maneuvering through the crisis is
much harder for smaller businesses,
which cannot afford the raft of advisers,
lawyers and accountants that large
companies have to guide them.
At the end of last week, the chief
executives of Visa and Morgan Stanley
publicly pledged not to lay off any em-
ployees this year. That’s reassuring for
the 77,000 workers at the two firms.
But the gesture was comparatively
easy for finance companies, which have
cash reserves, lines of credit and an
ability to borrow more money. They
also have businesses that will generate
enormous fees in the downturn.
The retail industry, on the other
hand, was struggling well before the
coronavirus pandemic forced retailers
to shutter stores nationwide. Compa-
nies like Macy’s and Gap, which com-
bined laid off more than 200,000 em-
ployees this week, lack the same cush-
ion and cannot generate revenue with
their stores closed.
For small-business owners, keeping
everyone employed may not be possi-
ble. But they will also have to deter-
mine what it would take for the com-
pany to endure the economic slowdown
and emerge after the crisis as a viable
business.
Even entrepreneurs who have the
personal wealth to weather the pan-
demic are contemplating what their
business will look like in a different
marketplace.
Bob Parsons, the founder of Go-
Daddy, the internet domain name com-
pany, said he was trying to manage a
steep drop in income.
He had parlayed the billions he made
into 18 businesses with 900 employees,
but he said most everything was shut-
tered, including his golf course, the
Scottsdale National Golf Club in Ari-
zona, and his Harley-Davidson dealer-
ship. His holding company, YAM World-
wide, includes a private lending arm
and 2.1 million square feet of commer-
cial real estate in Phoenix.
“One of our biggest deals is we own
shopping malls,” he said. “That’s a lot of
restaurants, nail shops, fitness centers,
and not a lot of rent is going to come in
from them.”
His goal is to keep most of his 900
employees employed through April and
re-evaluate after that.
Many business owners are struggling
with tough decisions on a personal
level, said Pierre duPont, a partner at
the financial services firm Cerity Part-
ners, where he has many business
owners as clients. “It’s just not about
the numbers,” he said. “It’s about the
people and the relationships that make
the business whole.”
Ms. Wecker said Skyline employed
some families that had worked there formany years. “We had a woman who
celebrated her 50th year working here,”
she said. “Her son and grandson work
for us, too.”
Brian Ascher, partner at Venrock, a
venture capital firm, recommends
pulling off the Band-Aid quickly. “If you
have to cut, the goal is to cut once, cut
deeply and do it quickly,” he said. “Then
you have to treat the remaining troops
really well, so they have psychological
safety.”
Rent is an area ripe for renegotiation.
Mr. Parsons is expecting less rent from
his tenants, and Mr. Ascher is encour-
aging companies he’s invested in to ask
for rent reductions. He has seen land-
lords cut rents by 10 percent to 20 per-
cent but also up to 50 percent.
Another strategy for business owners
is to stretch the cash they have. Compa-
nies with 18 months of cash are in thebest position, and those with 12 months
should try to stretch it to 18 months, Mr.
Ascher said. Companies with less than
12 months are going to struggle.
But they must spend the cash wisely,
said Bob Buchanan, head of business
transition planning at Wells Fargo
Private Bank.
“If they survive in the short run but
their decisions put them in a bad posi-
tion, it doesn’t matter,” he said. “If you
push off paying your suppliers, will
they still be in business in six months
from now? Many people haven’t
thought through that.”
For smaller companies without ac-
cess to credit lines, surviving until the
arrival of any stimulus money will be
difficult. Research from Next Street, an
advisory firm focused on small busi-
nesses, found that 25 percent cannot
make it past 30 days and another 25percent do not have enough cash to get
past 90 days. The Small Business Ad-
ministration loans that forgive ex-
penses like payroll may not arrive
quickly enough to help.
“You’re going to see a lot of press
that the money is going out the door,
but any funding will take three weeks
from application,” said Michael Roth,
managing partner at Next Street. And
given the rush of applications, banks
will put a priority on their existing
clients.
“It’s not going to real small business,
the businesses that people see in their
communities,” he said. “Those small
businesses are not going to get it for
four to six months.”
He pointed out that the lenders ac-
credited through the Small Business
Administration had never handled
more than $30 billion in a year; they’re
now being asked to process $350 billion
in three months, more than 40 times the
volume.
There is one source of quick cash:
The S.B.A. is offering $10,000 grants
through its economic injury disaster
loan program. Applying for one also
puts a business in line for a loan
through the same program, said Clint
Coons, founder of Anderson Advisors.
“There are opportunities out there to
save your business,” Mr. Coons said.
“But people think it’s more difficult
than it is to apply.”
If there’s a silver lining for private
businesses, several venture capitalists
noted that recessions spur innovation.
Russo’s, a 100-year-old fruit and
vegetable company outside Boston, lost
half of its revenue in 24 hours when the
universities, public schools and restau-
rants that it supplied closed. Its retail
store remains open, and business is
increasing.
Karen Russo, a fourth-generation
member of the family that owns the
company, said she had long wanted to
create boxes filled with a variety of
fruits, vegetables and other products
that could be placed directly in the
trunk of a customer’s car. Her father,
Tony, who owns the company, resisted
but finally agreed two weeks ago. Now
they have four types of boxes, which
are selling well.
“It’s hard to expand and contract at
the same time, but we’re trying our
best,” Ms. Russo said. “We’ve been
doing a lot of thinking about what we
have and how we can use it in a differ-
ent manner.”
Before closing its factories, Skyline
prepared its work spaces for a different
world when people return. It moved
workers six feet apart, reclaimed un-
used space in one factory and drew up
plans for shifts to have fewer employ-
ees working at the same time.
The company is prepared to lose
millions of dollars this year, but be-
lieves it can weather the downturn.
What worries the Weckers is the loss of
their business partners.
“A company like Macy’s scares us
because they owe us a lot of money,”
Mr. Wecker said. “But we also have 70
years’ worth of relationships with fabric
and foam suppliers. We’re doing our
part to continue to pay them on time.”Small-Business Owners Face Hard Decisions
In the struggle to stay afloat, some choices could harm employees who put in years of loyal service.
Wealth Matters
By PAUL SULLIVAN
Meganne Wecker, the president of Skyline Furniture in the Chicago suburbs, shut her business, but is hopeful that she will be able to get
federal relief. Russo’s, a 100-year-old fruit and vegetable company outside Boston, kept its retail store open, and business is on the rise.ANDREW SOUTHAM/SKYLINE FURNITUREKAREN RUSSOThe government has granted everyone
an extra three months to file — and pay
— their 2019 federal income taxes be-
cause of the coronavirus turmoil.
Whew! It helps to have wiggle room in
uncertain times.
But just because you have more time,
should you take it?
If you’re owed a significant tax re-
fund, for instance, get your return
completed and filed quickly so you can
get your money. The Internal Revenue
Service said the average refund as of
March 20 was about $2,900.
“If you’re due a refund, you might as
well file as quickly as you can,” said
Cindy Hockenberry, director of tax
research and government relations
with the National Association of Tax
Professionals, a trade group.
You should also consider whether
you expect to qualify for a federal stim-
ulus check. In response to the economic
hit from the coronavirus, Congress
passed a $2 trillion relief package that
will send payments in the coming
weeks to most Americans, based on
their income.
People with income up to $75,000
qualify for $1,200. Married couples
filing jointly, with income up to
$150,000, will get $2,400. (People with
higher incomes get less, or may get
nothing.) Parents also get $500 for each
child 16 or younger.
The government is basing the checks
on information from 2019 tax returns or,
if you haven’t filed yet, on your 2018
return, Ms. Hockenberry said. The year
the I.R.S. uses could affect the size of
your payment, if your circumstances
changed from one year to the next.
If you haven’t filed your 2019 return
yet, it may make sense to do a quick
calculation to see which year’s return
(2019 or 2018) will yield the larger
payment, said Susan Allen, senior
manager for tax policy and advocacy at
the American Institute of Certified
Public Accountants. Various calculators
are available online.
Another stimulus-related twist: Some
people who don’t usually file tax re-
turns, like those with low incomes, will
need to file a “simple” return with basic
information, to receive the stimulus
payment, the government has said.
But Social Security recipients who
aren’t typically required to file won’t
need to file any return, the Treasury
Department said in a statement late
Wednesday. Rather, they will have
payments automatically deposited intotheir bank accounts or mailed to them,
“just as they would normally receive
their benefits,” the department said.
People who are “unbanked” and lack
traditional bank accounts can have
checks mailed to them, an I.R.S.
spokesman said on Thursday. It’s possi-
ble “another option” may become avail-
able, he said, but right now checks are
the “default” payment method.
The three-month extension means
that if you owe money for 2019, you can
file your return when you’re ready, then
wait until July 15 to pay your taxes. If
you’re worried about your job securityand believe you won’t have money to
pay even with a three-month delay, you
can request a payment plan that would
allow you to pay off the balance over
time.
If, however, you feel financially se-
cure and have the funds to pay your tax
bill, it’s your call when to pay. You could
file your return and pay now if you’re
ready, or schedule a payment anytime
before July 15.
The delayed July 15 filing time also
applies to most other tax deadlines,
including contributions to individual
retirement accounts, Roth I.R.A.s andhealth savings accounts.
You don’t need to do anything special
to get the extra three months to file
your return; it’s automatic.
But if you think you’ll need even
more time to file, submit Form 4868 by
July 15 to get an extension to file until
Oct. 15. (If you expect to owe taxes,
however, you’ll still need to estimate
what you owe and make a payment by
July 15.) Self-employed people who file
for a formal extension can also wait
until Oct. 15 to make a contribution to a
SEP (which is short for simplified em-
ployee pension) I.R.A.TILL LAUERYour Money Adviser
By ANN CARRNS
You Have an Extra 3 Months to File Your Taxes. Act Wisely.
Owed a refund? It may be better to file quickly. You can also file now but wait until July 15 to pay any taxes that are owed.
software programs, but be sure to use
the link provided by the I.R.S. to make
sure you get the free version. Anyone
who doesn’t meet the income require-
ments can use the I.R.S.’s free “fillable
forms,” which enable online preparation
with limited guidance.. ................................................................................
I’m self-employed. Does the extended
July 15 deadline apply to payments for
quarterly estimated tax payments?
Yes — with a caveat. The payment due
April 15 can now be made July 15. But as
of this week, the I.R.S. hadn’t extended
the June 15 deadline for the second 2020
estimated tax payment. Accountants
expect the agency to clarify that issue
before the deadline, said Cindy Hocken-
berry of the National Association of Tax
Professionals.
. ................................................................................
Have states extended their tax filing
deadlines as well?
Most, but not all, states have extended
their tax filing deadlines to July 15 or
later. The Tax Foundation, a nonprofit
tax policy research group, is tracking
the states’ actions on its website.
I usually get free help filing my return at a
volunteer tax center. Can I do that this
year?
Many sites that use volunteers have
closed for now, as part of the efforts to
thwart the coronavirus. All sites spon-
sored by the I.R.S.’s Tax Counseling for
the Elderly program are shut “for an
undetermined period of time,” the
agency said. Volunteer sites run by
AARP Foundation Tax-Aide are sus-
pended until further notice.
The I.R.S.’s Volunteer Income Tax
Assistance program, which generally
helps people with incomes of less than
$56,000 a year as well as those who are
disabled or speak limited English, has
also closed many locations. But some
remain open and may allow people to
drop off tax documents for preparation.
To find a site near you and to determine
whether it’s open, the I.R.S. offers a
locator tool online. Be sure to call first,
to confirm that the center is accepting
returns.
If you earn less than $69,000 a year,
you can use the I.R.S. Free File program
to file your return at no cost. The web-
site includes options from commercialQ. and A. About Filing Tax Returns This Year