COVID-19
Financial Impact
The only comparable experience in history to this COVID crisis came before we were all born-- WWII. Although our natural tendency is to minimize threats, every indication is that this will have a profound effect on the economy for years. Even if the infection curve flattens, treatments are found and a vaccine becomes available, business leaders and investors are spooked and unlikely to make significant decisions for an indefinite time. Experts suggest that the 2019/20 wave of infections may merge into the 2020/21 season, opening the possibility that we will have a handicapped economy for the foreseeable future.
You're not likely the type to consider government "handouts" but the new CARES ACT programs deserve your attention as part of your Worst Case Scenario planning. The ACT is a desperate attempt to rescue the American Economy from entering a depression. Some of these are essentially low-strings grants to small business to stimulate the economy and rebuild national confidence. They are NOT like normal bank loans. Read the materials and think carefully about your past 12 months of expenses with regard to what might qualify for an EIDL disaster loan or the Payroll Protection. For example overhead, rent, payments to sub-contractors all qualify regardless of revenue - NOT just payroll to formal “employees”. Lastly, the revised unemployment insurance expands the definition of who qualifies, specifically self-employed and other facets that may now include you. If you have the slightest interest I urge you to at least apply to learn more about the details. At the very least, reserve your place in line for the $2 trillion dollar give-away intended to overcome your concerns about continuing business as usual. Don’t let all those tax dollars go to just the big companies.
CARES ACT programs to consider:
1- SBA loans, specifically “disaster” relief EIDL with immediate $10,000 advance - use for business development and new projects not just past projects
2- PPP Payroll protection via SBA - forgivable loan to cover your business expenses- NOT just employee payroll.
3- Expanded unemployment eligibility. See details with your state unemployment office
4- Direct federal grants (1,200 to individuals and 500 to children)