Weekly Digest – 22 July 2020

Are you feeling out of balance from the changes brought on by the pandemic? You’re not alone, according to economist Jeffrey Tucker. Thanks to the media, many of us have been overtaken by fear, which may cause us to act irrationally. Tucker recalled a book from 1841, Extraordinary Popular Delusions and the Madness of Crowds, in which the author Charles Mackay describes many panic-inducing events of the past that resulted in a sort of herd madness in which normal and rational people acted in stupid and cruel ways. As Mackey wrote almost 180 years ago, “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

Let us hope that a return to something like normalcy happens more quickly than in Mackay’s time!


Second Stimulus?

The House and Senate are back in session this week, so negotiations for a second stimulus are already underway. It will likely include a second check, but the amount and who will be eligible are not clear. Support for state and local governments, whose resources have been decimated by the shutdown, will likely be included. Expanded unemployment benefits are also likely to be continued; however, some proposals include a “return-to-work” bonus rather than continuing the additional payment of $600 per week.

One option that Treasury Secretary Mnuchin would like to see in the next stimulus package is to allow the hardest hit businesses to receive a second round of funding through the PPP, especially since $130 billion still remains in the program. Eligibility may include a “revenue test” to ensure the funds go to businesses that need it most.

Paycheck Protection Program (PPP)

Businesses that received funding in the first round and may elect the eight-week qualification period for forgiveness and apply for forgiveness now. However, there are many reasons to wait. First, as the AICPA notes, many lenders haven’t yet set up the required systems to process applications, nor have the payroll processers all developed the needed reports. Payments are not due until 10 months after funds are received or after forgiveness has been applied for, so there is no rush.

In addition, recent comments by Secretary Mnuchin imply that forgiveness may be automatic for any PPP loans under $150,000, which covers about 86% of loans. The Senate is also working on a proposal that would convert the same smaller loans to grants, so it appears waiting may be in the best interest of most small business recipients.

For those who want to see how much could potentially be forgiven, the AICPA has developed a new tool for calculating forgiveness.

Economic Injury Disaster Loans (EIDL)

Since June 15, the SBA’s EIDL loan program has been accepting applications. However, the emergency grant portion of the program, has shut down after exhausting its $20 billion allocation. Loans of up to $2 million are still available with interest rates of up to 3.75% for businesses and up to 2.75% for nonprofits. As of July 15, the SBA had approved more than $150 billion in loans.

Employee Retention Credit

The IRS is beginning to send out letters to applicants who are experiencing delays in receiving funds for the Employee Retention Credit. This program provides a refundable tax credit of up to 50% of $10,000 in wages paid to an employee by businesses that have been impacted by the pandemic. Some applications need additional information while other applications are being rejected or recalculated. More information can be found on the IRS FAQ page for this program.


Every year, the IRS releases a list of the “Dirty Dozen” tax scams, and this year’s list contains a few that are taking advantage of the pandemic. Here are a few of this year’s crop:

  • Phishing continues to be a problem. The IRS never initiates correspondence with taxpayers by email and will never request that personal information be provided by clicking a link.
  • Social media scams entice people to share personal information with someone who appears to be a close friend or family member and is requesting financial support or suggesting a donation to a charity. Some include a link sent via a messenger app that installs malware when the link is clicked.
  • EIP or refund scams happen when someone’s identity is stolen and a criminal steals their tax refund or stimulus payment.
  • Fake charities exploit current disasters to entice concerned citizens to donate to a legitimate-sounding charity.


Main Street Lending Program

The Federal Reserve’s Main Street Lending Program is now underway, and additional FAQs were posted on June 26. Prospective borrowers should review the Boston Fed’s borrower page, and contact a participating lender.

Leaving crisis mode behind

Now that we are a few months into the pandemic, it’s time to move out of crisis mode and take steps to ensure resilience and resurgence. Maintaining margins even at the loss of volume may be more sustainable in the long run than cutting prices to maintain volume. Evaluate every cost from a budget base of zero to ensure that every expense helps boost the business. Consider reinvesting savings into areas that will make a difference when full capacity returns.


We’re all spending more time in Zoom meetings, and making the most out of them requires a bit of planning. Setting meetings only if necessary, sending out a clear agenda well in advance, and controlling the level of interactivity can help your team make the most of your next online meeting.

Working from home may also mean spending more time online, but constant popups, cookie notifications and wall-to-wall ads are an annoying distraction. This piece from Fast Company includes tweaks to your browser to make your online experience more enjoyable.

Many people depend on in-person conferences to grow their networks, but in the COVID-19 era, that option has vanished. But it’s still possible to expand your network, even without conferences. Sharing your expertise, whether by volunteering, creating online content or courses, or contributing to online communities, can introduce you to new people who need what you offer.


Going back to work

The CDC recently released updated guidance for making sure office buildings are as safe as possible for returning workers. If offices have been vacant for some time, they may need to be checked for rodent, pest or mold problems. Assess the physical space for places where it may be difficult to keep employees apart. Encourage workers to stay home if they feel ill. Consider daily health screenings. Above all – communicate clearly with employees so that everyone feels comfortable with returning to work.

Reopening schools

Many countries around the world follow a different school calendar than we do in the U.S., so schools in some parts of the world have been open for the last several months of our summer break, in what Science calls “a vast, uncontrolled experiment.” When researchers looked into the data, they found positive trends around the world: “Together, they suggest a combination of keeping student groups small and requiring masks and some social distancing helps keep schools and communities safe, and that younger children rarely spread the virus to one another or bring it home.”
Here in the U.S., school districts are grappling with plans to open, complicated by rising rates of infection. Open fully? Remote only? Hybrid remote plus in-person? Delay until November or December? As discussed in this article in the Wall Street Journal, guidance from researchers at Harvard and the American Academy of Pediatrics is largely in line with what the Science researchers found: masks for older kids, social distancing as much as possible, keeping kids in pods and protecting staff by keeping them apart and far from students may help to limit the spread of the infection while allowing kids to return to school.

Economic recovery may take longer than expected

Officials at the Fed are warning that the return to normal will take longer than anticipated, as businesses realize that the pandemic will not be over quickly. A surge in cases has caused some states and communities to slow down or reverse plans to reopen. Another relief package from Congress in the coming weeks may help reduce the impact of a prolonged shut down.

However, some states that were hit hard early are now showing signs of improvement, with suggestions for what the rest of the country might consider to get back to normal. Connecticut mandated face masks early. New York kept all but essential workers at home. Massachusetts delayed reopening and is pushing a widespread testing initiative. New Jersey, like New York and Connecticut, is imposing a 14-day quarantine on visitors from out-of-state hotspots. Vermont has stepped up contact tracing.


We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!