Author Topic: Caronavirus - business implications  (Read 2885 times)

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Re: Caronavirus - business implications
« Reply #30 on: March 27, 2020, 10:35:17 AM »
I have picked up new work this week, but it was all for projects that already have momentum. Calls for new work, or ongoing work are obviously at a dead stop. If the economy does not start moving for real in a month, I will be laying off in Mid May. 20 families depend on me for their livelihoods.

If the stimulus package ever gets approved there is supposed to be small business loans that are forgivable if you keep up with rents and payroll. This would be a big deal for my businesses.  3-4 months of working capital is a big deal. I wonder how many strings will be attached?
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Re: Caronavirus - business implications
« Reply #31 on: March 28, 2020, 03:21:17 AM »
If the stimulus package ever gets approved there is supposed to be small business loans that are forgivable if you keep up with rents and payroll. This would be a big deal for my businesses.  3-4 months of working capital is a big deal. I wonder how many strings will be attached?

The article below says that the stimulus includes 8 weeks of support for small business.  It will be interesting to see how the SBA determines that amount for applicants.  This has the potential to crush seasonal businesses that are asymmetrically reliant on this time of year. 

We watched Bill Gates in an excellent "town hall" discussion yesterday.  He is proposing a complete 6-8 week shutdown of the entire country.  Lots of US regions are still just getting started in terms of virus acceleration. 

The uniqueness of this situation is very striking.  We will most likely have never tried to restart the economy from such a flat-lined state.  It is hard to imagine that this also won't have a unique group of yet to be seen hurdles. 

https://finance.yahoo.com/news/coronavirus-good-scenario-could-be-20-of-small-businesses-fail-212105855.html

According to Mills, currently a Senior Fellow at the Harvard Business School, small businesses have just around 27 days on average in cash. Restaurants have even less, with 17 days of cash on average. And if you run out of cash, Mills said, "you're dead."

ďI think that this is going to be maybe 20%, even 30% of small businesses could fail even in a good scenario,Ē she said.


« Last Edit: March 28, 2020, 03:25:31 AM by Admin »

Chan

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Re: Caronavirus - business implications
« Reply #32 on: March 28, 2020, 07:15:40 AM »
I have picked up new work this week, but it was all for projects that already have momentum. Calls for new work, or ongoing work are obviously at a dead stop. If the economy does not start moving for real in a month, I will be laying off in Mid May. 20 families depend on me for their livelihoods.

If the stimulus package ever gets approved there is supposed to be small business loans that are forgivable if you keep up with rents and payroll. This would be a big deal for my businesses.  3-4 months of working capital is a big deal. I wonder how many strings will be attached?

There doesn't appear to be many strings attached and loans don't need to be collateralized, however, the total loan limit is 2.5x average monthly payroll.  It's more likely that the repayment terms will be 10 year low interest (4%), not forgivable.  The SBA assistance is not as generous as the aid provided to the large corporate relief recipients.

https://www.cnbc.com/2020/03/26/small-businesses-get-help-in-coronavirus-relief-bill-but-is-it-enough.html
« Last Edit: March 28, 2020, 07:24:57 AM by Chan »

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Re: Caronavirus - business implications
« Reply #33 on: April 01, 2020, 08:57:25 AM »
I have seen the application for the SBA loan Payroll Protection Program as of this morning. If you have a business banker and you want this program, call them right now. The banks will be overloaded with requests as soon as this hits officially. Call your accountant too, they will be the most competent at filling this out. Mine has completed my forms already this AM.

It is pretty simple actually. You fill out the SBA form, and then provide the requisite documentation to the bank. Your estimated loan is 2 months of payroll. Typical documentation for forgiveness will be 3 months payroll tax forms for 2020, 2019 tax return, and account information for rents/utilis. Your bank will determine if you qualify for reimbursement at the end of the 2 months, the SBA has deputized them to do this.

If this works the way it is supposed to, it will beat the shit out of the last stimulus package for small businesses. The Obama stimulus package gave all the money to corporations and to government shovel-ready projects that weren't shovel-ready. I feel like maybe we can springboard out of this a little better than I initially thought.

We did have to lay off 3 people from our survey firm as they were mostly doing residential lot jobs and that is not essential. They are fine with the layoff plus the extra $600. Hopefully construction will be one of the first things to start back up.  I have a friend who has a pretty big daycare business and they are falling apart. They run 3 daycares in different regional areas, and only have 5 kids to watch, when they normally watch about 150. They laid off all staff except a few, and with the easy unemployment are very worried that they will have to train an entire new staff, once they can restart. Plus their monthly revenues dropped oh 95 %.



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Re: Caronavirus - business implications
« Reply #34 on: April 01, 2020, 11:51:43 AM »
I have seen the application for the SBA loan Payroll Protection Program as of this morning. If you have a business banker and you want this program, call them right now. The banks will be overloaded with requests as soon as this hits officially. Call your accountant too, they will be the most competent at filling this out. Mine has completed my forms already this AM.

It is pretty simple actually. You fill out the SBA form, and then provide the requisite documentation to the bank. Your estimated loan is 2 months of payroll. Typical documentation for forgiveness will be 3 months payroll tax forms for 2020, 2019 tax return, and account information for rents/utilis. Your bank will determine if you qualify for reimbursement at the end of the 2 months, the SBA has deputized them to do this.

If this works the way it is supposed to, it will beat the shit out of the last stimulus package for small businesses. The Obama stimulus package gave all the money to corporations and to government shovel-ready projects that weren't shovel-ready. I feel like maybe we can springboard out of this a little better than I initially thought.

We did have to lay off 3 people from our survey firm as they were mostly doing residential lot jobs and that is not essential. They are fine with the layoff plus the extra $600. Hopefully construction will be one of the first things to start back up.  I have a friend who has a pretty big daycare business and they are falling apart. They run 3 daycares in different regional areas, and only have 5 kids to watch, when they normally watch about 150. They laid off all staff except a few, and with the easy unemployment are very worried that they will have to train an entire new staff, once they can restart. Plus their monthly revenues dropped oh 95 %.

Did you see this part?

On March 27, 2020, President Trump signed into law the CARES Act, which provided additional assistance for small business owners and non-profits, including the opportunity to get up to a $10,000 Advance on an Economic Injury Disaster Loan (EIDL). This Advance may be available even if your EIDL application was declined or is still pending, and will be forgiven.
If you wish to apply for the Advance on your EIDL, please visit www.SBA.gov/Disaster as soon as possible to fill out a new, streamlined application. In order to qualify for the Advance, you need to submit this new application even if you previously submitted an EIDL application. Applying for the Advance will not impact the status or slow your existing application.

surfcowboy

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Re: Caronavirus - business implications
« Reply #35 on: April 04, 2020, 09:04:15 AM »
A different perspective here, and a bit of survivors guilt for the moment. Hopefully itís seen as a bright spot and not a flex.

Since I posted, weíve remained stable. My little company has 18 people at various levels of employment and will not have to lay people off due to the nature of our business (remote consultancy and software sales and development for the media business) unless this changes course radically.

This Summer when things are predicted to pick up (in some industries at least) companies will address their vulnerabilities like they did after 9/11. Not comparing the events but 9/11 changed the way companies viewed disaster recovery for their data. Now most companies can lose a location or all locations and simply set up shop again. Paper is gone, the cloud and other tech provides resilience that we didnít have before.

The next change will be remote work. A great piece about NYC discussed whether or not those companies who pay for hundreds of offices in Manhattan will keep all those offices now that they know that many jobs can be remote. Will LA continue the traffic snarls or simply adapt. Iíll bet more than a few do.

Iím talking about knowledge work here, not construction or hospitality or tourism but how will this not accelerate the move of jobs to those areas. No, it all canít become remote, but a lot of my friends see how we are faring and are adapting. More class inequality coming? Sure.

A friend just moved to a robotics company that builds a hotel concierge robot. Need towels? Want a snack? Need room service? They send the robot. You lease them for way less than that extra person on the clock all night. How will that not become a norm now? And with it, small jobs go away. Smaller hotels provide lower level of convenience, and the tech providers and larger chains who can afford this make more money. People in tech, who are largely left of center, are enabling a shift that the right permits. Good luck bootstrapping when all the jobs you do while you figure out a career go away, right?

We wonít be the same after this. But itís not all bad. But I think that economically  this will change us too. Those examples above are ďjust capitalism.Ē My company thriving while others tank, my employees making money they can use to buy stock and real estate for the ride back up is just capitalism. How long is that ok to the average American when they start to see this? How many of you are reading this and having a reaction? Are red blooded Americans going to defend my ability to prosper while they struggle just because I chose a different career? They have to under our current beliefs. Or, will they see the inequality baked into this whole thing?

We donít openly lay out our politics here and Iím glad for it. But a Conservative laying off employees while a Liberal makes money is going to be more prevalent than I think is fair or sustainable. Red states are just as valuable to America as Blue. But If those policies that make that trend possible are at their root conservative how does this continue to work?

Also, how long can small government believers take grants and forgivable loans from the government they want to limit? Itís got to be strange. And how long can liberal capitalists pay more tax to support that? Right? Itís a crazy thing when you think it through.

Like I said, survivors guilt here. But I canít see this not fundamentally making some people question the way our whole system is set up. I hope we can all evaluate things, pull together as a country, and make the recovery a chance to stop fighting and work on the common good.

This isnít directed at anyone here. SUPLeave, I donít know your politics and I donít care. Youíre a human and a surfer and thatís all I care about lol.

This thread really cracked me open and that happened after reading all the threads, not just yours. But we have similar sized staffs and you are in the middle so to speak, Good for now, but uncertainty possible later. I relate, but have less uncertainty. So please donít read into the order of the posts, I just was affected by your concern for your team and saw myself in that for sure. Iím not sure how I feel about all this yet. But I am allowing it to evolve.

If anyone has some thoughts from a more right of center take, Iíd love to hear them as Iím not as clear on how rational conservatives see the business side of this. I think, like the left, the right often is loudest at the edges while America sits in the middle, mostly confused by the shouting and left to deal with the reality of life.

Iím also going to keep posting examples of how tech is driving inequality. Some days Iím literally moving money from one group/class to another and I donít have an answer for what to do about that. Iím literally trying to help a friend transition out of a job that my company will help eliminate very soon. But I canít do that for 100,000 people.

Yíall take care and wash your hands. I canít wait to see you all on the water, where we belong.