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Senate passes bill to provide benefits to individuals and small businesses

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Re: Senate passes bill to provide benefits to individuals and small businesses

#101

Post by ta1234567890 »

ThisIsTheWay wrote: post #23
ta1234567890 wrote: post #12

Loans, even cheap ones, are a very shity way of "helping" small businesses and individuals. For example, a local restaurant where I live, will have to shut down for good in the next few days as they won't be able to afford their lease. If they get a loan for the lease, they'll be on the hook for that money with no guarantee of being able to pay it back and with way too much uncertainty in terms of when they'll be abl…

You should read the article. Here are the two paragraphs that explain what's happening. > Now, the Trump administration is asking Congress for roughly $1 trillion in new economic relief as lawmakers begin work on the next phase. And there's growing consensus among Republicans and Democrats that direct payments to Americans will be needed, but how much and when that could happen remains to be seen. > On Tuesday, Treas…

And from a later New York Times article:

> Lawmakers and the White House are already drafting another economic stabilization package that would send direct payments to taxpayers and provide loans to businesses.

I hope they do something a lot better than loans for small businesses.

Even direct payments won't be enough, unless they give small independent shops money to pay their leases every month until this is over, so they can keep their locations while there is no foot traffic.

Re: Senate passes bill to provide benefits to individuals and small businesses

#102

Post by cmurf »

dcolkitt wrote: post #94
buckminster wrote: post #57

Earlier quoted context omitted.

The business may no longer be profitable because it is now servicing a large debt it didn't previously have. And unlike regular business debt, the money wasn't invested into something productive. This could go very wrong. Then again, if the business is going bankrupt anyway, who cares how much it ends up owing?

Let's take a typical small business, and say it does $1 million a year in revenue. Cost of goods sold is $600,000 and fixed operating expenses are $350,000. Net margins are 5%, as is typical in small retail businesses. (These numbers are almost dollar for dollar from a local merchant-proprietor I know.) Let's say the quarantine results in revenue falling by 70% over the next four months. Without a reduction in fixed…

Why should their landlord be entitled to 100% income? Only the peasants and serfs should take on this burden, go into debt, in order to prop up all the lords?

Re: Senate passes bill to provide benefits to individuals and small businesses

#103

Post by themodelplumber »

dillonmckay wrote: post #99
themodelplumber wrote: post #95

Earlier quoted context omitted.

I see, that's interesting. Can you fill me in on the relevance to the bill? I'm just a skimmer and didn't pick up on that.

The bill, as I understand it, temporarily allows telemedicine to be billed via government programs, whereas prior to this ‘war’, it was not possible. After the ‘war’ is over, telemedicine will not be covered by such programs. Additionally, for a doctor to practice in a particular state, the medical board of that state grants and revoked licenses, restricting the practice of medicine to only doctors licensed in the st…

Thanks! That's interesting, I didn't know about the state lines and billing issues.

Re: Senate passes bill to provide benefits to individuals and small businesses

#104

Post by dcolkitt »

brayhite wrote: post #98
dcolkitt wrote: post #94

Earlier quoted context omitted.

Let's take a typical small business, and say it does $1 million a year in revenue. Cost of goods sold is $600,000 and fixed operating expenses are $350,000. Net margins are 5%, as is typical in small retail businesses. (These numbers are almost dollar for dollar from a local merchant-proprietor I know.) Let's say the quarantine results in revenue falling by 70% over the next four months. Without a reduction in fixed…

You’re assuming that four months have gone by and they didn’t have to sell assets to pay bills. Or relocate. Or lay off employees. Or employees quit because they couldn’t be paid with the loss of revenue. You’re modeling makes a lot of assumptions and discounts too many human-driven variables.

> You’re assuming that four months have gone by and they didn’t have to sell assets to pay bills.

That's exactly why the government is giving them loans. To cover the fixed costs during a period of temporary disruption.

Re: Senate passes bill to provide benefits to individuals and small businesses

#105

Post by conanbatt »

tryptophan wrote: post #69
conanbatt wrote: post #47

Earlier quoted context omitted.

What would you invest in right now to make money?

Bonds, perhaps corporate ones(yielding 3+% currently), are always a decent choice. Its trivial to make money with 0% loans.

If you got a 0% loan last month and bought an S&P bond index and sold now to pay back the loans, congratulations: you just lost 10%.

Re: Senate passes bill to provide benefits to individuals and small businesses

#106

Post by conanbatt »

boomboomsubban wrote: post #74
conanbatt wrote: post #47

Earlier quoted context omitted.

What would you invest in right now to make money?

With that money, a bank checking account would make you a millionaire in months.

APY rates are 0.3% yearly. Not precisely raking it in..

Re: Senate passes bill to provide benefits to individuals and small businesses

#107

Post by dillonmckay »

themodelplumber wrote: post #103
dillonmckay wrote: post #99

Earlier quoted context omitted.

The bill, as I understand it, temporarily allows telemedicine to be billed via government programs, whereas prior to this ‘war’, it was not possible. After the ‘war’ is over, telemedicine will not be covered by such programs. Additionally, for a doctor to practice in a particular state, the medical board of that state grants and revoked licenses, restricting the practice of medicine to only doctors licensed in the st…

Thanks! That's interesting, I didn't know about the state lines and billing issues.

I did not realize it either until a few days ago!

Re: Senate passes bill to provide benefits to individuals and small businesses

#108

Post by stubish »

ta1234567890 wrote: post #12

Loans, even cheap ones, are a very shity way of "helping" small businesses and individuals. For example, a local restaurant where I live, will have to shut down for good in the next few days as they won't be able to afford their lease. If they get a loan for the lease, they'll be on the hook for that money with no guarantee of being able to pay it back and with way too much uncertainty in terms of when they'll be abl…

It is also bad for their landlord, because the property will be idle until things improve. A landlord is better letting the business shutter for a year and have a paying tenant again when it reopens, than to kick out the tenant and pay the costs in a years time to entice a new tenant in an environment that would be best described as a renters market. If I was the renter, I certainly wouldn't be getting a loan. Renters have a good bargaining position right now.

Re: Senate passes bill to provide benefits to individuals and small businesses

#110

Post by chii »

ksdale wrote: post #32
dcolkitt wrote: post #28

Earlier quoted context omitted.

> Loans, even cheap ones, are a very shity way of "helping" small businesses Really disagree on this point. The primary value of a business is their assets, brands and expertise. All of those things will be just as valuable after the pandemic as they were before. Assets don't just disappear because they're not used. This is just as true for small businesses as it is for big business. Any business that was profitable…

I think you may be underestimating the extent to which a “small business owner loses a year of income” and “entire small business capsizes” are the same thing.

If the business gets a loan to last them through the crisis, they will pay it back when they earn money after the crisis. It means they are using future revenue to survive right now. The interest for this loan should be very low and if they default in the future, the govt takes the hit.

The hope is that not all businesses will default at the same time, and just like the hospital, these loans flatten the default curve, and prevent the economy from spiralling into a deep depression from these defaults.

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