- Have one-on-one conversations with every parent if possible – this is an opportunity for you to find out where they are, while explaining your situation and the reason for the decisions you’ve made. Given how quickly the situation is changing, it’s advised to do these calls daily.
- Emailing, texting and posting on social media is still important, but talking directly with parents and letting them know you’re fighting for them each and every day is critical.
Regarding finances, Kathy and Thad talked about ways to maintain a flow of income to support the center and its parents, while also finding ways to minimize operational costs. The question of whether to charge tuition is a big one, and Thad advised providers to work with parents to find the best solution for both parties. Here are some suggestions he made:
- Parents who can pay the tuition now could receive discounts applied in the fall.
- If parents are unable to pay the full tuition, they could pay half (or whatever you negotiate), and that payment could serve as a guaranteed placement fee for the next school year.
- Parents who are willing to pay tuition now would be eligible for no tuition increases for a period of time (such as one or two years).
If centers are forced to close, Thad said there are ways to still add value to their parents and children, such as doing a digital circle time for an hour or providing other digital learning opportunities.
In terms of financial support, Thad said centers can apply for a disaster loan from the Small Business Administration. Loans are available for a 3.25 percent interest rate and allow recipients to defer payment for 12 months. According to Thad, the application process is fairly simple, only taking about 30 minutes to complete. Something to note: the SBA doesn’t ask how much money you need, but rather calculates it based on the information you provide.
Lines of credit are another option for child care centers, particularly given how low interest rates are right now. And if you already have a line of credit, you can call your bank to see if you can get the terms extended.
When it comes to minimizing operating expenses, Thad and Kathy first reminded attendees that the filing deadline for 2019 taxes has been extended to July 15, so if a center owes taxes, it can hold off any payment for several months. They then talked about the importance of deferring payments whenever possible. Here are some of the key strategies they reviewed:
- Start at biggest expenses and work your way down.
- For mortgages, know that the bank is expecting your call. See if you can get a four-month deferment, or better yet, loan forgiveness for four months. At minimum, the bank should let you lower your payments to interest-only. And if you’re mandated to close, let the bank know you can’t pay the mortgage. Rest assured they cannot foreclose on your business.
- For facilities that rent, it may be a little tougher to negotiate a deal with your landlord; however, landlords don’t like empty buildings, so see what you can do. A landlord herself, Kathy recommended exploring if you can reduce payments to only cover the landlord’s mortgage while agreeing to extend your lease; offering to pay property taxes; or offering to defer payment for a while, then in a few months, spreading out what’s owed over the length of the lease.
- Look at services you could reduce and do yourself, like cleaning and cooking.
- Renegotiate contracts for services like lawn care and pest control.
- See if you can reduce trash service.
- If you have a good safety net of cash on-hand, see if any vendors you use would offer discounts for prepayment.
When it comes to staff cost strategies, Kathy and Thad recommended you wait for the stimulus package rollout to guide any decisions made on staffing (if possible). Here’s additional guidance they provided:
- Ask for volunteers to lay off or cut their hours (Note: make sure you know your state’s rules around this).
- Ask who is high risk or immune compromised.
- Offer older staff the ability to go home for their safety.
- Change your hours.
- Help with unemployment filing (Note: again, know your state’s rules to understand eligibility and processes).
- Look at offering sick leave or FMLA.
With regard to the stimulus package, Kathy indicated the Early Care and Education Consortium (ECEC) is working diligently to ensure child care centers get the financial assistance they need during this time. Without immediate relief, ECEC warns more than half of licensed child care facilities in the U.S. could close. Specific asks by ECEC, in partnership with other child care-focused advocacy groups like the National Association for the Education of Young Children (NAEYC), include:
- Securing $50 billion dedicated to child care organizations to defray upcoming operational costs (according to ECEC data, 25-30 percent of child care centers’ expenses are fixed costs).
- Recognizing child care centers as essential, and enabling workers to receive hazard pay.
- Offering assistance in finding and paying substitute teachers.
- Paying for sick leave.
- Providing higher levels of compensation to teachers.
Click here for an in-depth overview of the stimulus requests for child care organizations.
To view the webinar, click here.