The Coronavirus, now what?


Published: June 30, 2020

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The Entire World Must Find The New Normal!

No matter where one lives in the world, the topic of each day is now the Coronavirus. Here in America, we are up past 120,000 deaths due to this virus, with no end in sight until a vaccine found. With the warmer weather at hand, more people are venturing out and not practicing social distancing, wearing masks, and being in a crowded building with no spacing, which is now known to be a super spreader event that could be taken home to one’s loved ones.

This virus has taken its effect on all industries, globally. Government, businesses, religious activities, schools, and anything else one can think about, this virus has a choke-hold on that industry with no end in sight. Now Trump went on record as saying less testing is better, then he pivoted and said he was kidding. But yet he stated he does not joke, so what are we to believe?

Now the CDC says there are six more systems to those who have or are inline to catch this virus. Which are chills, repeated shaking with chills, muscle pain, headache, sore throat, and new loss of taste or smell?

The Devastation of US Businesses due to the Coronavirus

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As we continue to fight with the Coronavirus, some 22 million Americans have filed for unemployment. The government’s $349 billion small business financing program has run out of money. And this money ran out within two-weeks. Manufacturing, mining, and the loss of labor have devastated these industries. However, 24% of the workforce of 2019 now work at home.

Numerous individuals who have lost their jobs are in the leisure and hospitality industry, which include restaurants. The National Bureau of Economic Research has estimated that some 100,000 small businesses will permanently close. Nevertheless, larger organizations are not immune from this business effect. These organizations seek the bankruptcy code with the hopes of restructuring their debt and returning to the marketplace; some will, some won’t.

Oil and gas companies walloped, due to not many people are driving less, so the gas consumption lowered, and prices have dropped. With this lack of demand, you have Saudi Arabia, and Russia is jocking back and forth of adjusting the new cost of oil. Business organizations are dealing with the lack of money and the furloughing of employees and to others laying them off. With 45 million Americans filing for unemployment due to factories and mines are shutting down these and many other industries, we now have a new way of living.

And then you have the small businesses, which is said 25% of these small businesses will not reopen. $630 billion in two programs has gone out to small businesses. The Paycheck Protection Program(PPP), and the Economic Injury Disaster Loan Program (EIDLP), now 25% of these small businesses are considering closing permanently due to the Coronavirus. Now here is the problem; if a small business borrowed under $25,000, then the terms of their loan are favorable; they will not need to pay it back.

However, entrepreneurs who did, stand to lose everything due to the language in the loan agreement due to them signing a personal guarantee and collateral pledged. Meaning if not paid back, their assets taken by the financial institution whom they got the money.

Now, there is another way; bankruptcy. Business bankruptcy is a way for these businesses to restructure and come out of their financial woes, and start anew. Chapter 11, under the Small Business Reorganization Act, will allow the small business time to reorganize while in bankruptcy protection.

Why Are so Many Minority-Business Shut Out of The PPP Loans?

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Many black business entrepreneurs have a problem of getting the governments, The”Emergency Paycheck Protection Program Loans,” despite $60 billion set aside for minority and other underserved small businesses. The program for small businesses that is promoted by the Small Business Administration will pay up to $10 million per customer and need not paid back if the money is used t maintain employed worker’s salaries, pay rent, and utilities, then the loan can become a grant. However, the problem was those entrepreneurs’ well-resourced businesses with the help of their bankers, the money ran out within minutes, and the minority and underserved businesses that the money meant for was out of luck.

Training of entrepreneurs and small businesses needs implementing with the inclusion of all community non-profit organizations to help small businesses with the application process. This educational process helps small business people have a better understanding of the application process when it comes to getting financing for their businesses through government programs. Despite the good intention of the government, the program left many small businesses feeling left out of the process and feeling they are not needed.

Experts say the problem stems from social and economic inequities that need addressing. This concept or theory is not new, but applying these subtle changes to a group of people who feel left out of the economic picture and are contributors to the economic climate of this great nation. The strangulation of economic in parity to minorities and other underserved groups is a way of life for those in power and the unwillingness to share economic growth to all who have the willingness to strive.

According to Paychex, the hardest-hit industries minority communities are food services, arts, entertainment and recreation, manufacturing, and construction; transportation and warehousing. So, the government has acknowledged that there are problems with the current programs and administering funds to African-Americans small business owners and other groups. So, how do you deal with a situation of this nature and make it fair for all parties involved? The answer, more empathy for others and willfully sharing of resources for those who have the initiative to succeed.

Conclusion

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With 22 million Americans out of Work, Who Can Afford to Pay Rent?

So here is a novel question, can you pay your mortgage/rent? One hundred twenty-five thousand people have lost their lives to this virus, and 22 million people out of work, and over 100,000 small businesses never to open again, where do we go from here? Welcome to the new normal.

If you are one of the blessed folks, and still have a job, however, and you do not need social mingling with others due to working at home, then you are blessed. Were you able to pay your mortgage/rent since March 2020, and be able to do it again in June 2020? Is your family well and safe and not sick? Then once again, you are truly blessed.

The Pandemic-virus has effected us all. And the last 90 days of no work will put many of us to the brink of poverty, homelessness. Entrepreneurs, small businesses, then the community at large we are in this together, and we need each other now more than any time before. So, the question posed again, where do we go from here with this global virus?

If you are in the hospitality industry and you need capital for the sustainability of your business, with no-collateral contact us, and we will make it so of providing you with working capital for your business. Thus, the answer to the above question, this is where we can go from here.