By MaRico Tippett
As of this writing, all 50 states have started to reopen from the stay at home order caused by the COVID-19 pandemic. With this, one word comes to mind — patience. As a community as we start to unravel the effects of our businesses being shut down for two months, 36 Million workers filing for unemployment, and the uncertainty and confusion of the funding from the government stimulus, let’s all keep an open mind have patience and kindness as we work through the kinks. I am certain things will be rough at first, there are numerous rules and regulations that business owners must follow. Many employers are still confused about their responsibilities in providing a safe workplace environment. Many are even unsure if workers will come back to work. There are shortages in the supply chain. So, there will be challenges to say the least. Let us keep in mind everyone is trying their best. Everyone is doing their best and let us have patience. Let us show love, kindness, and respect. And let us continue to support our local businesses!
Many have asked about the economy and what we can expect. Short answer, no one knows. The projection is that we will see a recovery beginning in first quarter of 2021. But this is what we have seen thus far. The Congressional Budget Office projects gross domestic product will drop 38% in the second quarter of 2020. As we are seeing lots of home building in our area, new home construction starts fell 30.2% on a national level in April. Steven Hensley, a research analyst with Belfiore Real Estate Consulting, projects Tucson and surrounding areas will likely see an 80% drop in home sales in the second quarter, 50% in third quarter, and 25% in the fourth quarter. As for recovery, it is still uncertain how deep the effects of the shutdown will be. We know there are many businesses that have closed their doors due to the pandemic that will not reopen.
Finally, as to the Stimulus and the Paycheck Protection Program. There has been lots of frustration from borrowers in the business community with frequent changing of the rules for this program. This has left many unsure of how to spend the funding. This is what I have seen as best practices for those that have received funding from the PPP:
- Open a separate bank account to deposit funds into. This will allow you to keep very clear documentation proving where the funds were spent.
- Only spend the funds on allowable expenses. For the PPP this includes payroll, rent or mortgage payments and utilities. If you received the EIDL or disaster loans, spend this on all non-PPP working capital expenditures
- Keep great records! This will ensure that you can prove where and how the funds were spent and give you a greater chance of having the loan being forgiven.
All in all, we will get through this. As a nation we have overcome much. We have had to improvise and adapt. Our way to doing business is likely to change in the short term and possible for the long term. As a community, we have always come together for the good of all. Let us continue to help and support one another. We got this!
