ALL non-essential businesses are shut-down, aunts and uncles…
There is a divesting ripple effect to that that is NOT being talked about enough.
And, it’s becoming a burgeoning issue on the Prairie.
The ranching, farming, dairy, agricultural, oil, wild-catting communities, plus handfuls of small businesses dotting the roads; dirt paths and highways less than 15 miles outside the perimeter of our metroplex are deeply concerned.
Much the same goes for my native of Maine: lobstermen, fishermen, contractors of ALL stripes, coastline diners, day-care homes, and the upstate potato and chicken communities.
Why?
ALL the aforementioned businesses rely on a single institution: the small regional bank.
Most of America’s banks are woven into the local economy and a key source of credit for small businesses.
As the downturn squeezes more industries, community banks must balance helping these businesses with protecting their own bottom lines.
CASH FLOW…
The Coronavirus, unlike previous emergencies, is forcing millions of people to stay home and avoid contact with others. That is depriving our local community banks of one of their hallmarks – face-to-face interactions.
And as small businesses struggle to make payroll or purchase supplies, banks will have to write off some of their debts.
If the downturn drags on, many of these businesses may NEVER reopen, forcing these small-regional banks to swallow multiple losses.
Yes, the stimulus package signed by Trump last week allows small businesses to apply through qualifying banks for Small Business Administration loans – and, the loans can be forgiven when they are spent on payroll, rent or other items.
That said, allow me to conclude by mentioning, after talking to many bankers, locally, as well as wildcat pals, our Small Business Administration, on a sunny day, seems like a confused mass of humanity incapable of answering the simplest of questions, let alone providing essential details.
Sunny day to a tsunami…well, you get the picture!