From the Delaware Business Times
Commentary from Rob Martinelli
These have been the hardest weeks of my business career. I’ve been through the crash of ’87, the dot com bust of 2000, the big recession in ‘08 and ‘09.
Nothing compares to what is going on today.
I’ve put my life into building this business – Today Media – a company of 130 people serving four communities and a robust custom media operation serving many more.
I didn’t have a contingency plan for a pandemic.
On average, companies with fewer than 500 employees have less than a month of cash reserves, according to a study by the JPMorgan Chase Institute. Smaller businesses often have just a couple of weeks’ worth of cash to keep running. Today Media is better prepared than average businesses, but few businesses are adequately prepared for an event of this magnitude.
Thirty percent of Delaware restaurants have chosen to close completely instead of continuing operations focused on takeout and deliveries. More drop daily as carryout fails to sustain operations.
Local hotel occupancies have started to drop below 50% and the stats I am hearing are in the teens. A decline of 15% puts many owners in a cash-flow negative. Many industries face the same bleak picture.
Emergency SBA economic injury loans could play a big role. They offer low interest rates and a 30-year payback. But, getting these loans can take time.
The US Chamber of Commerce said, “The SBA also should be given the authority to streamline its disaster-loan approval process for amounts below $350,000 in order to provide emergency capital more quickly.” The group urged removing a requirement that small businesses show they can’t get credit elsewhere before turning to the SBA. We would support both of these much-needed initiatives.
The State of Delaware needs to do more. The HELP program for the hospitality industry is a step in the right direction, but it seems like a modest measure, considering that tourism contributes $3.5 billion to the State’s GDP.
To be eligible, hospitality businesses must have been open at least one year, have annual revenue of less than $1.5 million (since upped to $2.5 million), and operate in certain hospitality-connected industries. These limits would exclude a huge number of hospitality businesses and thousands of their employees. In other industries, except for essential businesses, the vast majority have now been asked to close.
Surrounding states and cities are doing much more. Delaware has a Rainy Day Fund. Let me tell you – it’s not only raining it’s a Cat 5 Hurricane, especially for small businesses…