Things are tough .., hang in there.

March 18, 2020

We are collectively experiencing something the likes of which most of us have never seen, an Economic Sudden Stop. But what the “insert your favorite expletive” is an Economic Sudden Stop?

An Economic Sudden Stop is the complete destruction of Supply and Demand at the same time. If you follow the work of Mohamed El Erian, you’ve been introduced this concept. In a Mach 12th interview on CNBC’s Squawk Box, El Erian said, “We are going into a global recession. We are going to see a spread of economic sudden stops.” As communities across the globe begin to shut down completely, El Erian’s week old prediction is coming to pass.

COVID-19, aka the Coronavirus, continues to spread in the United States and across the globe, factories are shutting down (Supply Destruction). Governments are asking people to stay home, businesses are laying off employees, and schools are closing. Outside of food, water, and toilet paper nobody’s buying anything (Demand Destruction). As a result, the stock market is down nearly 30%, and the trading floor will be soon closed because two traders have been infected with the Coronavirus. So, what the are we supposed to do now?

I’m in the camp who believes there are opportunities to be had, but always remember Keynes, “The market can stay irrational longer than you can stay solvent.” There are some experts who say this pandemic could last 15 months or longer. If that’s true, we don’t have a modern frame of reference, so proceed with extreme caution. If you’re a business owner, help is available.

If your business has been negatively impacted as a result of the Coronavirus (COVID-19) outbreak, the SBA has now provided preliminary information on the loan program that President Trump mentioned in his address to the nation earlier this month. SBA expects to make the program available in the coming days. The loans will be up to $2.0 million dollars and will be DIRECT LOANS from SBA. Terms will be up to 30 years at fixed rates of 3.75% for businesses and 2.75% for non-profit organizations. Borrowers will repay the SBA directly. Applicants will apply online and can monitor the latest news and launch of the program by going to The SBA will provide further guidance once the program is active and they begin accepting applications online.

For more details, please see the SBA Press Release outlining the Upcoming Disaster Relief Programs.

As always, if I can do anything to help, please let me know.