With the number of daily cases hitting all time highs across the country and the tone of Governor Mike Dewine last night it appears we are at risk for having another round of lockdowns across the state of Ohio and the country. Here are some steps you can take now to prepare your business and investment accounts in case we are forced to stay at home and close our businesses.
1. Call Your Bank
There have been several changes to the PPP loan forgiveness process since the first round of loans went out. Some of these changes include the process to have your loan forgiven and an extension of the covered period. For smaller PPP loans many companies are now eligible to use the form 3805 EZ which is a much simpler process. Here is a link to the updated 3805 EZ form. Talk with your bank about the possibility of additional PPP loans or small business grants that may become available if Congress approves additional funds. Ask them about the type of information they may be looking for to approve you for any type of small business loan or grant. Additionally, you can speak with you bank about the possibility of a line of credit. See what current rates are available and what the process would be to get this setup for your business. This can help for short term funds you may need for projects or to maintain payroll in case Congress does not get any relief passed quickly enough. Below is are 4 ways that the small business association can help you business.
2. Speed up your pipeline
Look at what projects, orders or sales you are anticipating in the future and look to get those completed in the next couple of weeks. There may be routine annual projects or orders that get completed at the beginning of each year and now might be the time to get that business in the door. This may mean working extra hours over these next couple of weeks but that extra cash flow can help if things get slow again due to lockdowns. Now is a good time to call your clients or customers and see if this opportunity presents itself. In addition to getting the projects completed now there could also be a tax incentive to do so. Although, the election results seem to be pointing to a divided government there is still a chance the senate will flip to a Democrat majority and tax raises could be passed next year.
Here is a look at the proposed changes to the corporate tax rate.
3. Stay Invested
The lockdowns that we saw back in the spring and even in some spots that continued throughout the summer showed us a few ways the market could react. The drop that we saw in the stock market was the fastest drop we have seen in history. That also lead to the quickest recovery from a bear market as well. Some of the best days in the stock market are oftentimes immediately following the worst days in the market. For this reason it is nearly impossible to time when to get in or out of the market. Therefore, this time around it is important to stay invested in your accounts. The Federal Reserve and Congress acted rapidly to get bills passed and this lead to a sharp rebound for stocks. Missing a day that a bill gets passed can be costly in the long run. Another reason to keep your money invested is because of the news we received earlier this week from Pfizer. This article states that Pfizer has a vaccine that has been proven to be 90% effective. When this news broke on Monday the stock market soared. Lastly, not all stocks are effected equally by lockdowns. There are many technology stocks and healthcare stocks that are seeing their highest returns on record.
Here is a breakdown of the major stock market returns for this year. As you can see the Nasdaq has drastically outperformed the other indices.
*Past performance is no guarantee of future performance.