Today I want to highlight McKinsey’s executive briefing on “Covid-19: Implications for Business.” In terms of the pandemic and public health, the article highlights 5 trends to watch. The bottom line is that a thoughtful approach is paramount. Read the full article here.
There are still many places where the epidemic is getting worse (the U.S., too, remains on the “upslope”).
Reopening is a massive natural experiment – make sure you learn from it (never before have we attempted to shut down the modern global economy).
The reproduction number (R) or transmissibility is important, but so is the absolute number of cases (which is still climbing in the U.S.)
It’s (still) all about testing, tracing, and targeted quarantine
Innovation – and clinical evidence – leads to hope (speed and scale of R&D response is unprecedented)
I have one other comment today, and it’s in response to a recent article from the New York Times, as shared by Finance & Commerce. Few minority-owned businesses are getting relief loans. A new survey, conducted by the Global Strategy Group for two equal-rights organizations, Color of Change and UnidosUS, included interviews with 500 business owners and 1,200 workers from April 30 to May 11. Just 12% of the owners who applied for aid from the Small Business Administration — most of them seeking loans in the $650 billion paycheck program — reported receiving what they had asked for, while 26% said they had received only a fraction of what they had requested.
By comparison, in a survey of small businesses by the Census Bureau from April 26 to May 2, three-quarters said they had asked for a loan and 38% of them said they had received one. Rashad Robinson, president of Color of Change, said the new survey showed that “if we don’t get policies to protect these communities, we will lose a generation of black and brown businesses, which will have deep impacts on our entire country’s economy.”
Know that SPACC is committed to direct assistance here. We partnered with the City of Saint Paul, SCORE, Ramsey County, and several culturally focused business development organizations to launch the Pay it Forward initiative to help find, train and match experienced financial and business professionals with local business owners who need assistance applying for financial help. Check out the program here. Please note - We are looking for technical experts in finance, business structure, and operations to help local culturally owned businesses apply for the still-available PPP funds as well as local grant programs. Find out more and volunteer to become an economic first responder.
SPACC continues to see other ways to support all businesses with an eye on those most disenfranchised. Your support and help on the economic front line will ensure our economy comes back stronger, with businesses better equipped for long-term survival. A Call for Support: It appears that the Senate may take action as early as today to make changes to the Paycheck Protection Program (PPP). However, adding 501(c)(6) non-profits to the program is NOT a part of the bill they will be considering. Please reach out to your senators today and urge them to include all non-profit organizations in any bill making changes to the PPP.
SPIRE Credit Union has organized a program, “SPIRE Gives Big.” Recognizing the deep impact of COVID-19, SPIRE organized a campaign to give $250,000 to 187 Minnesota businesses and charities. In a unique approach, SPIRE’s leadership reached out to each of its 300 employees among 20 branches and 20 administrative departments to select local businesses and charities. The 187 businesses represent communities throughout Minnesota and SPIRE’s 20-branch service area. Causes included animals, cancer, child wellness, community outreach, financial education, homelessness, hunger, mental health, veterans and more.
UCare is taking several actions to make health care more accessible and affordable: Reducing member premium payments by 20% in July and August 2020; removing copays for Medicare primary care and mental health clinic services – including telehealth – during the COVID-19 public health emergency; continuing to waive copays, coinsurance and deductibles for COVID-19 tests and associated clinic, urgent care and emergency room visits; continuing to waive copays, coinsurance, deductibles for COVID-19 inpatient hospitalizations through September 2020; supplying health care providers, group homes, nursing homes, assisted living facilities, social service organizations and vulnerable members with telehealth home kits, masks, healthy snack boxes and iPads; offering $25,000 grants to small provider groups and community clinics to build infrastructure during COVID-19.
Governor’s Media Briefings
Wednesday: What's New on June 1? Restaurants and bars are able to be open for outdoor seating only.
There can be no more than 4 people at a table or 6 from the same family
Tables must be 6 feet apart following social distancing guidelines
Reservations will be required; no walk-ins allowed
Masks will be required for employees and strongly encouraged for patrons
Restaurant can have 50 people maximum at one time in outdoor seating
Restaurants are encouraged to check with local government and be creative in making outdoor space available
Take-out and delivery options remain
Personal care settings such as salons, barber shops, and tattoo parlors also can re-open on June 1 but cannot exceed more than 25% occupancy at a time
25% occupancy is based on the fire code/occupancy permit
Masks are required for both employees and patrons in these settings
Appointments only; no walk-ins allowed
Campgrounds can open with social distancing measures.
Individual youth sports and those played with fewer than 10 people are allowed. No games yet. Daytime summer camps allowed; overnight camps not yet (guidance on DNR website).
Churches: indoors, 10 people or less. Drive-in services can workif people stay in their cars.
Note: for any businesses coming back in for June 1, business preparedness plans are still required. Share with employees and customers.
The supply (or lack thereof) of Personal Protective Equipment (PPE) was the focus of the Tuesday COVID-19 press conference. At a hearing earlier that day in the Minnesota House Select Committee on COVID-19, members of the Minnesota Nurses Association gave some dramatic testimony about the lack of PPE and the risks undertaken daily by nurses caring for COVID and non-COVID patients.
As a state, we’d been tracking the “doubling rate” of cases. Had been about 9 days, now has stretched out to 13 days. This makes the spread of the disease more manageable.
Thus far, more than 80% of deaths in Minnesota have been in long term care, and nearly all had underlying health conditions.
State is preparing temporary state-level morgue in case deaths overwhelm existing capacity. We are hoping to avoid the horror in Brooklyn, overwhelmed by the pandemic.
Casinos - owned by tribal governments, which, as sovereign nations have made the following opening plans:
Mystic Lake and Little Six Casinos resume operations on May 26.
Grand Casino Mille Lacs – targeting June 1, see here for their guidelines
Grand Casino Hinckley – targeting June 1, see here for their guidelines
Treasure Island Resort and Casinos – TBD
Running Aces opens hotel on June 1, waiting on state approval to open card room and start racing
The latest from SBA, PPP and EIDL
As of Monday, $116B PPP funds still available.
Over 43k businesses and nonprofits have received grants.
Minnesota has received $2.4B.
In round 1, MN was 3d per capita in terms of utilization.
Round 2, average size of loan dropped to $54k. Nationally, the average on round 2 is $73K. 91% of the loans are under $150K.
In Minnesota, over 1200 companies received $185M.
Nationally, over 45K companies received $153M advance.
The latest at the MSP Airport from Delta:
A typical day at the airport is 40,000 customers. Today, that number is about 3,000 each day, and that’s doubled from the beginning of the Stay At Home order.
Delta is experiencing $45M/day losses with 800 grounded airplanes.
Delta is holding flights to a maximum of 60% of capacity.
The Saint Paul Port Authority is proud to be an approved lender for the DEED Small Business Loan Guarantee Program. Loans up to $50,000 are available to Saint Paul businesses with fewer than 250 employees. Nonprofit organizations that pay property taxes will be considered for financing. Qualifying expenses include the purchase, maintenance, or repair of machinery and equipment. Funds may also be used for working capital, secured by fixed assets when possible. The Saint Paul Port Authority loan program is limited to $1 million. Qualified applications will be approved on a first come first served basis as long as funds are available.
Other Saint Paul updates:
On Tuesday, the Saint Paul Downtown Alliance hosted a very well attended “Safety Zoom" focused on downtown with SPPD, Metro Transit Police, Ramsey County Sheriff, Saint Paul DSI, and others. Highlights include:
Part 1 crimes (more serious) are down from this time last year.
Part 2 crimes (quality of life crimes) have increased, particularly around Union Depot and Mears Park.
Of highest priority is the unsheltered population. DSI Director Ricardo Cervantes offered these numbers: Saint Paul currently has an estimated 154 individuals living in 76 encampments around the city, mostly very small – maybe 1-2 tents. Some sites are more problematic, and the City is working with partners to keep sites clean and provide other options.
BOMA raised the specific and ongoing issue of downtown skyways. Will be asking Mayor Carter to extend the 7pm daily closure beyond June 3.
In that same “Safety Zoom,” Cervantes updated the participants on development activity.
Recently issued 2 major building permits, 1 for demolition of paved areas and 1 for grading the site.
Next out is ordinance permit for Public Works, for sewer, water, electrical, etc.
2 bldg permits are coming soon: 1 for affordable housing and 1 for retail/office space.
As of last week, 60 site plans are under review.
4 projects are close to launch, with conditional permits: West Side Flats (171-unit apt bldg, $32M project); Snelling site (160 units at $28M), American Indian Magnet School addition ($38M), and senior living complex at 170 Western (47 units at $7M).
The US Chamber has published a PPP Guide to Forgiveness. Link is in Resources below.
I continue to be impressed by CliftonLarsonAllen and the resources they are pushing out. Here is an articleon the guidance, and their review thus far.
Larkin Hoffman has posted a podcast reviewing the guidance and their reactions. Listen to the podcast here.
Additionally, next week, the House of Representative is expected to consider the Paycheck Protection Flexibility Act (H.R. 6886). This bipartisan bill from Reps. Dean Phillips (D-MN) and Chip Roy (R-TX) modifies certain loan forgiveness requirements under the Paycheck Protection Program. For example, the bill eliminates the limitation on non-payroll expenses counting towards loan forgiveness and extends the 8-week window for eligible expenses. However, the bill does NOT address the existing restrictions affecting 501(c)(6) organizations and other nonprofits. As noted above, please reach out to Senator Smith and Senator Klobuchar.
Session ended without a decision on how to distribute the $667M in federal aid for counties, cities, and towns.
COVID-19 update as of 5/21/2020 Confirmed cases in Minnesota: 18,200 Confirmed cases in U.S. (as of 5/21): over 1.5M Confirmed cases globally (as of 5/21): over 4.8M Cases requiring hospitalization: 2,380 (representing 13% of total) #s currently hospitalized: 566 #s no longer needing to be isolated: 12,488 #s tested: 173,556 Total deaths in Minnesota: 809 (663 cases in long term care or assisted living facilities) Total deaths in U.S. (updated 5/21): over 93.6K Total deaths globally (updated 5/21): over 329K Cases in Counties represented: Hennepin County: 6,029 (502 deaths) Ramsey County: 1,925 (86 deaths) Dakota County: 929 (32 deaths) Washington County: 431 (23 deaths)
PPP updates from SBA:
Treasury has released loan forgiveness guidelines: View the application and instructions here.
Paycheck Protection Program still has money available for organizations negatively impacted by COVID-19. Contact participating lenders.
The U.S. Chamber published a new Paycheck Protection Program Guide to Forgiveness with an easy to understand explanation of what they need to do to apply for forgiveness of their PPP loans. Click here to download the guide.
Minnesota Retailers Association has created a webpage for retailers re-opening that walks you through requirements and best practices. www.mnretail.org/reopen
Innovative Office Solutions has developed a return to work program guide they are generous enough to share here. They include ideas, products, and preparedness plan. Direct questions can be directed to Karla Gunderson, email@example.com.
The interactive Minnesota COVID-19 Public Dashboard can be found here.
Minnesota Department of Health (MDH), DEED, and the Minnesota Department of Labor and Industry (DLI) have developed a template plan and guidance that businesses can use as a starting point. Businesses aren’t required to use this template, but a business’ plan does need to follow CDC and MDH guidelines and OSHA standards.
If your small business is within ½ mile of Allianz Field, apply for a grant from the Neighbors United Funding Collaborative. This grant is specifically for small businesses within a half mile of Allianz Field with annual revenue below $3 million who are either a small business or nonprofit with a retail or service-based business model.