Across the country business has come to a halt due to the COVID-19 pandemic. The Dow Jones hit its lowest mark since 2016 and the overall economic impact could take years to recover. Some of the hardest hit sectors are Commercial Aerospace, Oil & Gas, Travel, Insurance, and Banking. Since the start of the pandemic Latitude Commercial alone has lost 6 deals due to the virus and we can expect more to come. With passing of the Coronavirus Aid, Relief, and Economic Security (CARES) Act package we hope to see the curve flatten for the economy as well as the virus itself.
President Trump signed into law the CARES Act on March 27. Overall, the CARES Act is set to allocate $350 billion to help small businesses keep workers employed during the pandemic and economic downturn. The extensive legislation introduces a tremendous amount of important measures, specifically the Paycheck Protection Program is proposed as the lifeline for small businesses. The pledge of the program is that the loans can be partially or fully forgivable, provided the borrower meet certain criteria.
These loans will be directed through the banks and are eligible for borrowers in operation prior to February 15, 2020. The loans can go up to 2.5 times the borrower’s average monthly payroll costs, not to exceed $10 Million. Some of the eligible expenses include:
- Salary, wage, commission, or similar compensation
- Payment of cash tip or equivalent
- Payment for vacation, parental, family, medical, or sick leave
- Allowance for dismissal or separation
- Payment required for the provisions of group health care benefits, including insurance premiums
- Payment of any retirement benefit
- Payment of state or local tax assessed on the compensation of the employee
A summary of the emergency program, prepared by the US Chamber of Commerce, can be found here.
Most of what you see and read is disturbing, we need to keep things in perspective. Most of us in this country enjoy a high standard of living as compared to other countries. The US could also be much more worse off as compared to the devastating amount of deaths (per capita) occurring in countries such as Italy, Spain, and France.
Given the unprecedented nature and spreading of the virus a lot of tough decisions are being made by everyone on how to go about life. Business leaders shutting down the business and laying off employees, politicians closing down city services, and parents trying to keep their sanity being locked indoors with their crazy @ss kids and a puppy that bites everyone and everything! Sorry that got a little personal! There are a lot of critics out there questioning how fast we could have sheltered in place, the timing of the stimulus, and the definitions of “essential” employees. To put it in perspective we have made it through World Wars, Depressions, Great Recessions, so the US will make it through this. Stay safe everyone and remember through every dark night, there’s a bright day after that!
Sincerely,
Aaron McDermott, CCIM, LEED GA
Co-Founder/President
