If you feel like you are being challenged as a leader like never before, it’s not your imagination. The latest Marcum LLP-Hofstra CEO Survey shows how much of a battering many companies are taking in the COVID-19 era. Unfortunately, there’s been pain all around.
The survey found that 56% of middle-market CEOs have already seen business disruptions due to COVID-19. Meanwhile, a whopping three quarters of companies are operating at reduced capacity in the U.S.
When it comes to international business, many firms have had to shut down operations entirely in several international markets.
Perhaps not surprisingly, 80% of CEOs said they have ceased operating in Italy, which has been hit very hard by the coronavirus, and 45% have stopped operating in China.
Some firms stopped doing business in countries you might not expect at first glance. Among companies that operate in Canada, for instance, 22% have shut down operations there.
The situation is likely to be more extreme the next time we conduct the survey. This one was done the week of March 16 among 256 CEOs nationwide. At that time – which now seems like a distant memory – California, Illinois, New York and New Jersey were the only states that had issued stay-at-home orders to slow the spread of the virus. Now most states have done so.
The federal government’s ability to get cash flowing quickly to the business community is going to be critical. Some banks have started processing applications for the Paycheck Protection Program, as many of you have experienced, but at some institutions, the application process has been bumpy. How fast the banks can get applicants vetted and money into their bank accounts to cover the next couple of months of payroll will be critical to many companies’ ability to weather the next quarter successfully.
The Economic Injury Disaster Loans program, which offers advances and loans to companies that have suffered economic harm from COVID-19, will also play an important role. With demand for disaster loan funding very high at the moment, many businesses that filled out preliminary applications still have not received funds – including an advance that was initially promised to come within three days of a successful application. Let’s hope that the federal government is able to pick up speed with this program, as many businesses are counting on it.
In the meantime, ingenuity and innovation are going to be critical for every company. If you are looking for creative ideas on how to pivot in today’s environment, your Marcum advisors are here to help.
Today is Good Friday. As many of you know, in the Weiner household we celebrate both Passover and Easter. Due to COVID-19, we won’t be able to continue our tradition of hosting the first Seder in South Florida this year, or doing Easter brunch at The Breakers. But I’m grateful our family is safe and healthy and that we were able to hold our own smaller celebration as a family for the first Seder and as we’ll do on Sunday. Wednesday night for Seder, we had my entire family, my 87-year-old mother in Boynton Beach, FL, my sister and brother and their families on Long Island, my two older sons in their NYC apartments, and the five of us all singing Dayenu (if you’re not Jewish you won’t understand) via FaceTime. As the saying now goes, next year in person.
To all of you, Happy Passover, Happy Easter, stay safe and healthy, and remember we are all in this together.