Stimulus checks and the Payment Protection Program (PPP) is all people seem to talk about these days, and for good reason. It’s become so comical to listen to the media and people who have received their checks.
Everything from memes about people feeling rich to people just barely making their bills on time. It’s a rollercoaster out there to say the least.
What I find hilarious is not many small business owners actually qualified for PPP let alone received funds.
Even more hilarious, if you do not have a W2 employee in your household you most likely haven’t received your stimulus checks either.
It could be my growing pessimism of this entire relief program or my pessimism in Government being able to actually help the little guy on the front lines, but it seems like the people this money needed to go to, never got it.
71 publicly traded companies received $300 billion of the $350 billion allocated to this relief program. Some companies who have plenty of cash on hand received money from the government. Yet mom and pop shops are stuck with fending for themselves while our politicians argue over another stimulus bill.
It was like the SBA (Small Business Administration) was coming out with new guidelines and new ways people can apply DAILY. All the while the fund was drying up so fast it didn’t actually reach or help small business owners.
We never received our stimulus checks because we pay the IRS every year and are single member LLCs. For some reason when we login to the IRS site, they say we may not qualify even though we have never made enough money to not qualify. Why is my payment status unavailable, because none of the reasons listed make sense?
What Does Small Business Do Now?
We keep doing what we have always done, grind through the tough times and enter crisis mode.
The people who lived through 2008 know what I’m talking about. Cut spending and hoard cash as much as possible.
When the economy opens up, you will be in a position to take advantage where others cannot and leverage the cash you were able to conserve.
Just like in all cycles, real estate and construction tend to lag anywhere from 6-18 months meaning we will most likely not see major price reductions for a few months. Believe me, they are coming.
Real Estate Implications
If you think people are sitting at home thinking, “Wow honey, we should buy/sell a house now” you are mistaken. Think about your own spending habits and how you are approaching things.
You are most likely waiting to see how this shakes out before listing your home or buying. Meanwhile, all the people who were already committed to buying and selling are moving forward.
Realtors keep saying, “I am still so busy and don’t plan on slowing down” – I totally get it and actually applaud their business skills in maintaining their clients.
I’m arguing that new business, like the folks who are just starting to think about selling or buying are most likely sitting on the sidelines through this.
It’s no one’s fault, just the way people think about their biggest purchase of their life. Construction is the same way. Jobs that were already in the pipeline will continue on time. But new jobs will be harder to come by as cash and funding sources dry up.
My point for real estate is simple, if you are an investor, our time is about to come. There will be plenty of deals to scoop up and add to your portfolio and you need to start building relationships with wholesalers like myself to bring you deals once the time is right.
Don’t Rely on The Government Support
Clearly, the PPP program as well as the stimulus checks were not designed to help the real small businesses and entrepreneurs on the front lines. It was designed to help bigger employers who are multi-state and needed the cash to keep people employed.
We all thought the main point of the $350 billion was to help the coffeeshop owner down the street, or the nail salon who cannot afford rent this month, or the bakery who doesn’t want to lay off all their staff.
Instead, none of them even got approved for funding and if they did, they aren’t receiving any funding.
I hope we as a community come out of this whole ordeal with our eyes wide open and hold the appropriate people accountable for this chaos. We are vigilant people as Americans and will make it right for the small businesses.
Stay safe and keep grinding. Our time will come.