By Ira Robbins
When the funding period for the SBA’s Paycheck Protection Program (PPP) opened, Valley received more applications in one short period of time than we’ve ever witnessed in our history. Contrary to what you might hear about restaurants and hospitality businesses being hit the hardest (they account for less than 10% of PPP loans), a vast majority of PPP loans are stretching across our business communities. From dentists and doctors to pet stores and hair salons, the coronavirus pandemic is cutting deep into our local economies.
The reality is many of the small business owners I’ve spoken with are still at risk of running out of cash-flow within the next few weeks. And the worst part is many of them don’t even have the option to make the difficult choice of opening their business – even if it means risking their lives – in order to stay in business. It’s time now for all of us – government and the private sector – to stop pursuing the easy route of shutting down our economy and join together to ensure that we reopen safely.
We all fear COVID-19. But over the last few weeks many of us, in some way, have adjusted to that fear in order to bring some normalcy to our lives. All around us, private businesses are making adjustments to their operating model, from changing hours of operations to remodeling the flow of their businesses to practicing social distancing. Consumers are also adjusting by wearing masks and keeping a safe distance from others while in public. As we’ve done in past crises or economic downturns, we as a society can adjust. But as in prior crises, the first thing we need to do to invigorate our economy is to instill confidence. In this situation, confidence in government, businesses and people is more important than ever.
The best place to start is with our federal and state governments providing a clearly defined path forward, which includes a substantial investment in testing, contact tracing and ample supplies for frontline healthcare workers. It also means investing in future pandemic preparedness, not just in the short term in the event there is another surge in cases, but in the long-term so we can face a future pandemic with a strong response. Giving people the confidence that we are doing everything we can to ensure their safety and are prepared to face this better next time, will go a long way in instilling consumer confidence as they venture out beyond grocery and hardware stores.
Next, the private sector needs to be given more flexibility to make necessary adjustments to their business. For instance, one of the requirements for PPP loan forgiveness is that 75% of the funds are used for payroll expenses. With such a wide diversity of businesses seeking these funds, with entirely different operating models, these kinds of regulations can handcuff a business owner. Payroll may not be the biggest obstacle for a company of two people versus a company of 50. Some business owners may need to address structural costs to adjust to new social distancing standards. Flexibility for business owners will allow them to better ensure the safety of their customers and employees and allow them to be creative in this changing business environment, which may also require more innovative ways of engaging with customers.
Despite what I’ve heard from concerned business owners, what I’ve also seen from them during this crisis is their resilience. It’s the same resilience that got us through past crises from September 11th to the Great Recession. We all want to move forward in what the new normal will look like, and I understand the governor has some difficult decisions to make right now to get us going. But the path forward to promoting economic recovery shouldn’t be about making a choice between reopening and maintaining the health and well-being of all New Jerseyians.
Reopening our economy is a process that involves continuous adjustments to our lives, continued investment by our government in pandemic preparedness, and flexibility for our local businesses to adjust to this new environment. That’s how we can do this right. The enemy is not COVID-19 — it’s the pandemic in general. A strategy of waiting for a vaccine is wrong for our country and citizens. To reopen our economy, we need to work together and act decisively now.
Ira Robbins is president & CEO of Valley Bank.
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