Effect of economic crisis on America’s small businesses [slides] • Hacker News Board

Re: Effect of economic crisis on America’s small businesses [slides]

#371

Post by jriley » Sat, Mar 21, 2020, 10:21 AM UTC

The SBA statistics are sobering. 46 days for application, 24% approval per slides. In my experience, asking for $50k was harder than $350k and a large distraction. Vendor financing and credit cards filled the gaps.

IME if you needed capital, you weren’t approved for capital. If you were cash flow positive with solid income and 2 years of operating history and tax returns, you could put up collateral and refinance at a lower rate.

Over ~5 years I was denied ~5 times, discouraged from applying ~3 times. I was approved once after several years of track record with a co-signer pledging a property with 100% collateral.

That small business (exited 2019) would have really struggled to survive right now. It would also be a difficult time to ask friends, family or spouse to help.

I wish I had a better policy suggestion to offer; it's a hard problem. Good luck to all small businesses out there, I’m pulling for you.

Re: Effect of economic crisis on America’s small businesses [slides]

#372

Post by roenxi » Sat, Mar 21, 2020, 10:21 AM UTC

jlj wrote: post #323

giantDinosaur wrote: post #290

Earlier quoted context omitted.

Honestly, what do you think is going to happen to these people if the economy totally shuts down? it's going to be easy to have a chronic & serious health condition? The same? My feeling is that I'd rather be chronically sick in a good economy than in a depression. What happens when medicine becomes unavailable due to supply chains being cut off?

"these people" are dying in mass and overwhelming the medical system and even the crematoriums. And they deserve to have quality of life and die with dignity and proper care. I'd rather a strong, comprehensive public health response than trying to economic recovery ourselves out of this problem. IMHO, the economy is a distraction to numb us from the tsunami of ICU patients and deaths to come. The economy is not sacre…

The part of the economy that is responsible for electricity, clean running water, food and emergency services absolutely is sacred. The rest of it can maybe be put on hold for a few months; but it will be very painful for many, many people.

What isn't sacred are the people who own all that. They are as disposable as are any other parts of the economic machine. Replacing them is probably a good idea.

Re: Effect of economic crisis on America’s small businesses [slides]

#373

Post by cc81 » Sat, Mar 21, 2020, 10:29 AM UTC

PedroBatista wrote: post #335

giantDinosaur wrote: post #290

Earlier quoted context omitted.

Honestly, what do you think is going to happen to these people if the economy totally shuts down? it's going to be easy to have a chronic & serious health condition? The same? My feeling is that I'd rather be chronically sick in a good economy than in a depression. What happens when medicine becomes unavailable due to supply chains being cut off?

So what’s your proposed solution? Let’s get back to work, let the fire burn and who dies, dies? It’s a solution ( it wouldn’t work the way you think, but it’s an option), but at least admit it clearly and live with it.

I think the interesting question (that we don't know yet) is how much of these actions are political because they want to show themselves strong and the public demand some kind of action. And how many of these actions are needed to flatten the curve, prepare the healthcare system and to work on cures/vaccines? For example shutting down schools have a huge effect on society but does it have a similar huge effect on the spread of disease?

How long can you just shut down industries, keep kids out of school and will it make a significant dent in the total mortality? It could be that a couple of weeks of social distancing will be enough but can it be months and what are the comparable effects.

I know it is more dangerous than the normal flu and I will not downplay that but take Italy (that yes, would be worse of without shutdowns) you have 4k deaths so far; mostly old people while a couple of seasons ago they had 24k deaths attributed to a bad flu season.

The social distancing and shutting down society needs to work reasonably fast otherwise I wonder if it is worth it, at least in countries where you already have widespread disease.

Re: Effect of economic crisis on America’s small businesses [slides]

#374

Post by cc81 » Sat, Mar 21, 2020, 10:32 AM UTC

saiya-jin wrote: post #370

40four wrote: post #255

Earlier quoted context omitted.

Based on what? According to the Bloomberg article - ”As of March 17, 17 people under 50 had died from the disease. All of Italy’s victims under 40 have been males with serious existing medical conditions.” They reached maxed capacity of beds or ventilators right? We read stories of doctors having to make life & death decisions. Where are the dead 18 year olds? Spreading info like that on a hunch, or an exaggeration,…

Current situation in Geneva, Switzerland - 2 critical male patients, one 27, one 29, no prior comorbidities at all. Not sure they will make it. Wife is a doctor and just checked this in their information system. The idea that relatively young (most of folks here) will be just fine is not true. With overwhelmed healthcare, most criticals will simply die. Once doctors will get sick (and they will), it will make everyth…

>Current situation in Geneva, Switzerland - 2 critical male patients, one 27, one 29, no prior comorbidities at all. Not sure they will make it. Wife is a doctor and just checked this in their information system.

I don't know about the law in Switzerland but unless you are lying that is something she could be fired for in many countries.

Re: Effect of economic crisis on America’s small businesses [slides]

#375

Post by somewhereoutth » Sat, Mar 21, 2020, 10:32 AM UTC

raincom wrote: post #258

codingslave wrote: post #7

The stock market is largely collapsing because: 1.) Hedge funds levered up their capital 5 - 15x to make more money, then got caught with their pants down. So they all panic sold at once, crashing the market. 2.) CEOs of large corporations used cash to buy back their stock, inflating the stock price, and depleting their cash reserves. So now those same companies are on the brink of collapse, causing the credit market…

Low interest rates are the biggest culprit in this. Low interest rates have given these CEOs to borrow money to pump their stocks. Had interest rates been higher, say 6 percent, (a) these CEOs wouldn't have borrowed money to pump their stock, and (b) many investors would not have invested 60 to 90 percent of their portfolio in stocks. Another consequence of these low interest rates is (c) the inflation of real estate…

Absolutely this. Someday we need to have interest rates somewhat sticky at ~5% (or whatever the sensible figure is), and lean more on fiscal policy to control the economy. Whether there is a viable path to that point is unclear. Perhaps the money printing required to cushion the economy will spike inflation, and once we get back on our feet we hike rates to control it?

Re: Effect of economic crisis on America’s small businesses [slides]

#376

Post by cc81 » Sat, Mar 21, 2020, 10:47 AM UTC

PedroBatista wrote: post #337

vkou wrote: post #317

Earlier quoted context omitted.

It also brought an unprecedented amount of economic development to what was an incredibly backwards country. Not that it's a model to imitate. Although some folks in this thread sound rather ready to sacrifice millions of people, for the sake of keeping the economy limping along...

> Although some folks in this thread sound rather ready to sacrifice millions of people, for the sake of keeping the economy limping along... That’s because they believe they are young and would fight off the virus with no problem. Change one of those variables and they will change their tune.

I can understand that it is prudent to take a worst case scenario here but it depends on how widespread this thing already is without us knowing it.

So Sweden has right now 1,639 confirmed cases with 16 deaths so far. There are some young people treated in critical care but so far it has been older people who has passed away, often with other diseases as well. Sweden currently only tests older people, people with severe symptoms, healthcare workers and similar personal and those who can work from home these days and travel is discouraged.

One expert estimated that we have around 100k infected in total right now and discussed that some things like shutting down schools for younger kids will have a large effect on society but not do that much on the spread of the virus. Instead you should focus on protecting vulnerable groups, stay home if you feel any symptoms of cold etc.

100k out of 10 million population would fit roughly with Iceland who did random sampling and found 1% of their population affected.

Of course he acknowledged that there is no way to know and taking extreme measures are better than taking too small but emotional/political reactions vs practical is really a discussion to be had.

Re: Effect of economic crisis on America’s small businesses [slides]

#377

Post by jdance » Sat, Mar 21, 2020, 10:56 AM UTC

apatters wrote: post #341

nostromo wrote: post #214

Earlier quoted context omitted.

> total economic shutdown seems to be the only option left That's quite the overreaction. Italy found that among fatalities the median age is over 80 (older than the average lifespan of an Italian man). 99% of fatalities were among people with a prior illness. About 50% of the deaths were people suffering from at least three other illnesses. https://www.bloomberg.com/news/articles/2020-03-18/99-of-tho... To put it an…

You will get tarred and feathered for your comment but you are correct. Here is why you'll get tarred and feathered, because right now the media is covering the health costs of the virus extensively, but it's not covering the economic costs, which are already unfolding now in the form of businesses dropping vendors and announcing layoffs because their anticipated revenue until further notice is zero. I've seen so man…

I noticed yesterday for the first time that there is starting to be some discussion about the damage caused by the lockdowns. Before that I was amazed that no one was interested in even discussing it. So there seems to be a trend of people waking up to it. Thanks for your brave comment. Bros are slow ;)

Re: Effect of economic crisis on America’s small businesses [slides]

#378

Post by sjg007 » Sat, Mar 21, 2020, 11:13 AM UTC

testfoobar wrote: post #38

The virus is terrible. But our solution could turn into an economic catastrophe. It simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. The solution is aggressive, continuous testing so that people can feel safe going back out. 1. Make hundreds and millions of the rapid tests available. 2. Deploy them to every business, every institution. 3. T…

There are not enough tests and it will take months and months to make them.

Also HIPPA laws prevent what you propose.

Re: Effect of economic crisis on America’s small businesses [slides]

#379

Post by danvet » Sat, Mar 21, 2020, 11:13 AM UTC

cjslep wrote: post #328

testfoobar wrote: post #38

The virus is terrible. But our solution could turn into an economic catastrophe. It simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. The solution is aggressive, continuous testing so that people can feel safe going back out. 1. Make hundreds and millions of the rapid tests available. 2. Deploy them to every business, every institution. 3. T…

> It simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. The Swiss Federal Council is setting aside billions of CHF (I think the total is currently at 32 billion) for exactly this: some relief for small and medium sized businesses. They've recently announced a process to have 80% of your salary insured up to a certain high cap, between 150k an…

42 billions total now, the 32 billions just announced is on top of the 10 billions already put aside last week.

And yes with these measures essentially any income is now assured: Salaries, salaries of SMB owners (normally excluded from unemployement benefits for obvious reasons), hourly workers, limited contracts, internships/apprenticeships, self-employed (i.e. without being employed by an LLC or something else like that) business like artists. Also daily stop-gap money if you have to stay home for more than a few days to figure out how to take care of your homeschooled kids.

Plus like 20 billions in credit guarantees for small businesses to avoid a cash flow squeeze.

All measures use existing infrastructure for paymenet (commandeering the banks for the cash flow squeeze credits) to guarantee the money has arrived by end of the month, latest. And that it will continue to flow, like regular pay check.

Re: Effect of economic crisis on America’s small businesses [slides]

#380

Post by sjg007 » Sat, Mar 21, 2020, 11:20 AM UTC

apatters wrote: post #341

nostromo wrote: post #214

Earlier quoted context omitted.

> total economic shutdown seems to be the only option left That's quite the overreaction. Italy found that among fatalities the median age is over 80 (older than the average lifespan of an Italian man). 99% of fatalities were among people with a prior illness. About 50% of the deaths were people suffering from at least three other illnesses. https://www.bloomberg.com/news/articles/2020-03-18/99-of-tho... To put it an…

You will get tarred and feathered for your comment but you are correct. Here is why you'll get tarred and feathered, because right now the media is covering the health costs of the virus extensively, but it's not covering the economic costs, which are already unfolding now in the form of businesses dropping vendors and announcing layoffs because their anticipated revenue until further notice is zero. I've seen so man…

Take a pause for 2-4 weeks and reevaluate. Everyone has a 6 month buffer right..? :)