The economic impact of COVID-19, coronavirus

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The economic impact of COVID-19, coronavirus

The COVID-19, or the Corona Virus, has upset the apple cart for many folks and businesses. Aside from the obvious concerns for the health of those exposed to the virus, the country has reason to be concerned on an economic level. Newton’s third law says that “for every action, there is an equal and opposite reaction.”

The opposite reaction to social distancing, self-quarantine, and especially government or medically mandated quarantines is found in two places: public panic and overreaction, and the negative effects on businesses, especially small businesses. As people (consumers) are encouraged (or forced) to stay home, they aren’t spending money. This hurts businesses. As people overreact or panic, they purchase in quantities that are excessive and unnecessary. This prevents other consumers from purchasing for their needs. Ultimately, either way, the business suffers.

For these reasons and others, Congress passed HR 6074 Corona Virus Preparedness and Response Supplement Appropriations Act. This act gives the Small Business Administration (SBA) to provide low-interest direct Economic Injury Disaster Loans through their Disaster Loans Programs. The program targets small businesses, and non-profits, that have been severely impacted by the Corona Virus. These loans are working capital loans for up to $2 million to help overcome the temporary loss of revenue.

 

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