The Dow Jones Hit 30,000: That’s Only Half the Story

It’s no surprise that large companies guide the stock market. They are tethered to the wishes of stockholders inexorably focused on the bottom-line profitability at the cost of all and everyone else. Despite the big money and formidable power they wield, their results only measure half of our economy.

Food lines are miles long from Dallas to New Jersey. A large percentage are hourly workers with families who have no food for the first time in their lives. Their pride dimmed, humiliated, they begin lining up at 4:30 am to have a chance at securing food before it runs out. 

The reality is a tale of two economies.

The real story is the backbone of our economy – the small businesses – are struggling and dying. And along with them, our buying power is plummeting. Chain reactions are reliable constructs as evidenced by the rapid evaporation of the middle class. The pandemic kicked the downward-spiral and the lack of access to meaningful financial resources sealed the demise.

According to WSJ/Vistage, the shifting landscape of resources has forced “drastic cuts and a pivot to new business models to keep going … small business optimism in the US economy has softened since October with 53% expecting the economy to improve in the next 12 months, a 3-point decline from the prior month.”

The Small Business Administration’s Paycheck Protection Program (PPP) shut down in August. Institutions such as banks, private foundations, and the federal government that once offered aid, grants, and credit to small businesses, have either shuttered or put aid on hold indefinitely.

The burdens of small businesses - the people on the ground - are suffering from the mismanagement of the pandemic. The pillars of our communities are paying with their lives and livelihoods for the inaction, greed, and gross denial of what we, the people need to survive this crisis. No pending federal stimulus package while businesses crumble. The Senate is on vacation.

Eighty-eight percent of U.S. small business owners have exhausted their Paycheck Protection Program (PPP) loan, says a new report from Babson’s Goldman Sachs 10,000 Small Businesses program.

The uncertainty in the future of the U.S. economy has led to innovative ways of working around the lack of funding. The ability of small businesses to keep the lights on, to ultimately survive, “reflects their demonstrated entrepreneurship and willingness to adapt to whatever changes may take place.”

Reduced hours, work-from-home arrangements, phased office schedules, and attempts at social distancing workspaces are helpful but insufficient in most cases. 

“Often when you think you’re at the end of something, you’re at the beginning of something else.” ~ Fred Rogers

Some of my clients have successfully engaged with the following agencies and programs:

·      The SBA currently offers the Economic Injury Disaster Loan Program, “providing up to six months of working capital, with a fixed interest rate of 3.75 percent with the option of deferred payment for a year, but interest will accrue. Loans have repayment terms of up to 30 years.”

·      SCORE - I have worked with this SBA affiliated non-profit over the years, and highly recommend their guidance and services. The Small Business Resilience Hub offers access to financial, educational, and mentoring services. Their website provides links to federal resources, including tax filing assistance for small businesses suffering the effects of COVID-19.

·      The US Chamber's Save Small Business Initiatives publish a state-by-state guide outlining all loans, funds, and grants that your state and local governments and private organizations on offer.

·      State and city governments offer various resources - some parts of the country provide more robust programs to assist their local small business owners than others. Contact the offices of your mayors and governors, and state economic agency websites for relief program updates.

·      Inc.com offers this guide to Covid-19 resources and strategies my clients have found valuable - note this website is updated frequently, with the most current revision 23 November 2020.

We must never forget: We’re all in this together.