2020 was one hell of a year. People are looking to 2021 as if viruses or national and world events pay attention to a calendar. Hopeful of a new year is one thing but with the political upheaval and coronavirus, hope is in short supply. And if it were a new year, things don’t simply change with the flip of a calendar page, especially a worldwide virus.
We saw a lot in 2020 but we’ve also learned through the mess. We want to share some thoughts with you now that 2020 is over.
We told you all about PPP when it was first widely available. We wrote about PPP forgiveness when it started to happen. PPP loans on the books were holding up deals for 2 reasons. One, because buyers were concerned about the status of the loans and banks were unsure how to classify “possibly forgivable” loans. Reason number two, the banks are the ones who are responsible for administering the forgiveness and this clogged up the pipeline for them to be able to efficiently do SBA lending. This is getting better and going to be less of an issue as more loans start to move through the forgiveness cycle.
Takeaway: The world is awake now to the virus, the Government knows that small business must go on or the economy goes flat, more help is on the way in 2021.
The Markets and Banks
The markets have reacted unusually both at home and abroad. As trillions of dollars were added to the national debt, the markets acted bullish. Banks, as expected, are more cautious and have started asking questions rather than being too eager to lend money. Things began to tighten up.
Takeaway: A full year has not occurred since the shutdowns began. When businesses start comparing month-to-month reports, most likely in March 2021, the markets will react.
2021 will be lacking the same thing 2020 lacked: certainty. But business, as is life, is filled with uncertainty. In any other year when we have sold businesses, we don’t guarantee anything. This year is no different but perhaps gives more reason to take pause. It is possible to buy a healthy business and through poor decisions and bad business practices, run into the ground. It is also possible to buy an average business and turn it into a massive success.
We have no idea what diseases or disasters may be looming. While life may slow down during national and international crises, it goes on. You have to ask how long you are willing to put your life on hold for more certainty–which no one can guarantee anyway. If nothing is more certain a year from now, you will have lost a year of your life. You could have bought and built a business or sold one and been enjoying the rewards. If you passed up buying a business that is making 50K a month, and you waited a year later to decide to pursue such an opportunity again, you may have lost out on 600K in income.
2020 has reminded all of something we’ve always known: When you are going through hell, keep on going. You must hold fast to your principles, work as hard and smart as you can, and adhere to your compass the best you know how to.
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