Good Morning! It is going to be a beautiful day and it is also PPP day, with the banks beginning to meet with business people to accept their loan applications and distribute the loan proceeds. There was some noise last night about banks not being ready to proceed, but it appears that was just a bluff by the banks to obtain a higher interest rate. See below. It will be interesting to hear about people’s experiences and once we do, we will let you know.
Update To The Paycheck Protection Program – So the banks squealed that they might not be able to get it together for the rollout of the PPP. Treasury fell for Wall Street’s bluff, doubled the interest rate from 0.5% to 1.0% on the PPP loans and, magically, the banks are now ready, willing and able to take the PPP applications and make the loans. Is there any one that is not looking to grift Main Street and the citizens of this country during this crisis? The banks just got about $3 Trillion in liquidity from the Fed a couple of weeks ago and have no exposure with respect to the PPP loans, so why did they need a higher interest rate? UGH! (Reposted from last night)
Solutions Are Possible – Asheville Pizza and Brewing has reopened its Merrimon Ave. location and is providing zero contact carry out. Customers order online, call when they arrive and the restaurant puts the food on a table outside and goes back inside leaving the customer to pick it up. No word on whether you can order beer with the food.
Perspective – Visual Capitalist has a striking infographic entitled Visualizing the History of Pandemics. While the graphic is based on data from three weeks ago, it is still interesting to view and continues to provide some perspective. If the date of the data turns you off because you think it is untimely, you should still go check out the site because it has a lot of very interesting data presented in unique visuals.
Unemployment Data and Visuals – We posted the unemployment numbers for the USA and NC yesterday, but here is a map of the numbers for every State as presented by The Real Economy Blog.
Put it To Good Use – WLOS reports that the Board of the Buncombe County Tourism Development Authority met April 2 and the millions that it currently has may not be used for some type of emergency fund. “An emergency fund does not fit in one of those purposes. So, it doesn’t matter what the TDA wants to do or the board members want to do. The legislation binds them to what that money can be used for,” TDA attorney Sabrina Rockoff said. This article piqued my curiosity and I went to find the meeting minutes to read the full explanation, but they were not posted (not unusual considering the meeting was just held yesterday). It seems to me, however, that if the BCTDA is bound by a legislative act, it can be freed by a legislative act. If the Governor can, by Executive Order, close private businesses, lockdown people in their homes and prohibit the assembly of people under penalty of imprisonment, then surely a measure can be included in the next EO. Also, I wonder whether sufficient power has been delegated to Buncombe County to change the provisions of the BCTDA.
Variation of Take Out – Another WLOS report mentions that Texas Roadhouse is selling a variety of fresh-cut steaks including ribeyes, strips, sirloin and filets that customers buy raw and take to grill at home. About a week ago, I read about a restaurant trying to sell its food inventory and the government stopped them. I could not find the article, but will try to locate it.
Data Misuse – Apparently the New York Times published an article yesterday suggesting that the South is dangerously spreading the Corona by not practicing social distancing. In the article, entitled “Where America Didn’t Stay Home Even as the Virus Spread,” James Glanz dissects cellphone location data from the data intelligence firm Cuebiq. Cuebiq tracked 15 million people’s cellphone locations to map travel patterns across America. The resulting map does indeed suggest southerners continued to travel more than two miles even as states and local governments were issuing stay-at-home orders to slow the spread of coronavirus. But as a Middle School student could quickly determine, the map is misleading because of the two mile limit imposed. The point I am trying to make is that even accurate data can be used to create misleading and erroneous conclusions.
A Reminder About The CARES Act – While not anywhere near perfect, the CARES Act does have a lot of good in it for small business. Even more important, and as this article reminds me, it is what we do with what is provided in it. As the author states in the concluding paragraph: “We are a nation of entrepreneurs. We are a collection of creative, ambitious, and determined people who always rise to the occasion. Politics and viruses aside, this is our chance to come back stronger than ever.” Yes, we are and yes, we will.
Exercise Helps You Think – It is a sunny day and it is to warm up as the day progresses, so it is a great day to get outside. However, most if not all outdoor facilities are closed, so you might just have to walk around your neighborhood. In addition to the neighborhood walk, don’t forget Mo and Arnaldo. See below.
Hard Exercise Works – If you are missing the gym and/or need some discipline to get your workout done, check out Hard Exercise Works in Asheville. Arnaldo, the owner, runs video classes throughout the day, 6 days a week. Cost is $25 per week, and he offers the opportunity to borrow weights as well. Today’s workout is principally cardio and no weights.
Move With Mo! – Mo Goldstein is a human movement coach, massage therapist at Apeiron Center Asheville. He is also the Founder and owner of Functional Wellness, LLC. Adapting to the current environment, Mo is offering his “Move With Mo!” class for free every weekday on Instagram from 10:30 to 11:00 am. Don’t think you need to be some type of musclehead, gym rat for Mo’s classes. They are meant for regular people that have lived their life and now experience the aches and pains associated therewith. Focusing on movement of specific areas of the body, you will feel much better after taking his class. Also, Mo does a simulcast on Instagram (front view) and Facebook (side view), with each platform presenting a different angle, so you can really understand the movement. So get your device and move to his Instagram page.
Maybe House Arrest Is Not so Bad – House arrest does not seem so bad as compared to the choice offered to prisoners on Rikers.
Rules For Customer Loyalty – Several days ago, I watched a webinar by Lisa Zahiya, owner of Studio Zahiya, discussing ways for businesses to deal with this crisis, and she was quite good and informative. I have tried to find a recording of it to post, but have been unsuccessful. Once I get it, I will post it. Regardless, one of the points she made was to focus on your profitable customers. Everyone knows the old adage of 80/20: 80% of your profit comes from the top 20% of your customers. Zahiya’s advice was that your top 20% customers are even more important now and it is vital to keep in contact with them. I would suggest that you make the effort even if your operations are completely shut down (i.e., your business sells goods to retail outlets and your suppliers are closed or your supply chain is broken). Call them up and let them know what is going on and keep them updated even if there is little to no change. Demonstrate that you care about their business even if it is non-existent at the moment because your conversation will be a lot more pleasant once you do resume operations. Anyway, here is an article on related matters entitled: Coronavirus: Five Rules For Growing Customer Loyalty from CFO Magazine
Farmers – Okay, I know that there are few farmers in AVL, but there are in Buncombe and surrounding counties, and their operations are small businesses and they have unique challenges. As such, we will throw them a bone with a summary of the CARES Act provisions that will benefit farmers and agriculture. Also, here is a podcast by AgCountry Farm Credit Services discussing the CARES Act and its effect on agriculture. I will admit I have not listened to the podcast so I have no idea how useful it may be.
Outdoor Industry – So, a friend texted me this morning stating that Minneapolis has closed all of its beaches (it is the City of Lakes) for the summer even though freezing rain is predicted for the weekend. You might be asking yourself: “who cares?” The answer to the question is that this governmental action may be an important harbinger to our local outdoor industry. For example, during the Buncombe County press update yesterday, one of the speakers warned people not to go rafting with others this weekend. Also, I went to park at the Rice Pinnacle parking lot in Bent Creek yesterday to go MTB and it was closed off (I did not see any signage explaining the reason for the closure). To those in the outdoor business, here are some resources you from the Outdoor Industry Association.
PPP Up and Running – Several tweets from Treasury Secretary Mnuchin states that the PPP is up and running. As of 9:33 am this morning, there had been $400 Million in loans originated. If $400 Million is originated every 30 minutes and you take an 8 hour day, you have $6.4 Billion gone just today. At that rate, the limit is reached in 54.5 days. Also, consider the possibility that not all banks were up and running on PPP loans this morning. Bottom line: The limit is going to be reached quickly. CALL YOUR BANKER if you have not yet.
Remote Work Thrival Guide – Today at 1:30pm, Social Venture Circle is hosting an interactive webinar led by Cheryl Eaton (We Are Guru) on how you and your employees can thrive at this time working remotely. Sign up here. All registered attendees will receive a copy of Cheryl’s timely ebook, the Remote Work Thrival Guide: In and Beyond the COVID-19 Pandemic after the webinar. Social Venture Circle is a membership network aimed at entrepreneurs. I am not a SVC member and received notice of this webinar by email. It sounded interesting to me, but decide for yourself if it is worth your time or not.
PPP Update – Trying to fill a teacup from the firehouse of information to be able to present clear, relevant and timely information to you about the PPP. Bank of America has its latest PPP information and it is making clear that it is lending to only small Business clients with a business lending and a business deposit relationship at Bank of America. What this means is a client’s pre-existing lending relationship with B of A may include small business, commercial or corporate credit cards, conventional business loan or lease, business lines of credit, business auto loans, practice solutions loans, trade and asset-based loans. I think that this might have to do with the Know Your Customer laws banks are required to follow. Last night, I saw a mention about how the banks had requested that the Treasury suspend the rules and regulations regarding the Know Your Customer, but never saw Treasury’s response. I suspect that the KYC requirements will be dropped for those loans made pursuant to the PPP.
Think About Your Business Model – When contemplating how you want to operate at the conclusion of this insanity, one model you might want to consider is the delivery of your product or service on a subscription basis. This is something I have been thinking about and was recently made aware of a book, The Forever Transaction: How to Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave, authored by Robbie Kellman Baxter, which was just released a couple of days ago. She is a business consultant and previously wrote The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue. Something to think about.
Insurance – The Commissioner of the NC Department of Insurance issued an Order on March 27, 2020 (amended March 30, 2020) deferring insurance premium payments for 30 days. The deferral is not automatic, but rather the insurers are required to give their policyholders the option to defer payment for 30 days and it is up to the policyholder to request a deferral. The Commissioner’s order applies to all insurance companies defined in the statute including health insurance, residential property and automobile insurance. This order also applies to collection agencies, motor clubs and premium finance companies licensed by the NC Department of Insurance. The order will defer not only premium payments but will also defer statutory time requirements. Notices of cancellation, for example, will be deferred. Once the deferral expires, policyholders will be required to bring their payments current to avoid cancellation. To fully understand the order, it is worthwhile to read the FAQs issued in conjunction with the order. The unintended consequence of this order is that insurance agencies typically get paid by insurers based on the premiums paid. No premiums paid means no payments to the agency.
Impact on Multifamily Housing Industry – J Turner Research undertook an industry survey to understand how multifamily executives are dealing with the Coronavirus crisis and the impact of this pandemic on day-to-day operations and leasing. As the industry continues to develop its response to deal with this outbreak, the results of this study can inform management companies to prepare and fine-tune their policies and procedures around Coronavirus.
Investors Need to the Difference of Risk vs. Deep Risk – Author (Deep Risk and The Investor’s Manifesto) and investor Bill Bernstein is interviewed on The Compound, which is a worthwhile YouTube channel if you are interested in investing, wealth management, markets and the economy.
VC & Founder Sentiment – Here is a survey of VCs and start-up founders about their sentiment regarding COVID-19 and its effect upon them, the Country and the economy. How does it compare to your thoughts on the future?
TGIF Happy Hour – I know it is early, but these are abnormal times and it is sunny and warm enough to enjoy happy hour outside. The price is right, but the crowd at my backyard bar has not changed for weeks. First week here at Asheville.Works is done and dusted and, hopefully, we helped you all one way or another. If we have, then let your friends know. If not, let me know what sucks at Andrew@asheville.works I did not get to anyone’s experiences of the PPP today, but will try to get some material over the weekend and relay it to you so you know what to expect when you meet your banker. Email me if you want to share your experience. Right now my expectation is to spend the weekend writing some opinion posts about business, the economy, markets and society to share with you. Enjoy the weekend!