jdc1 wrote:
While it is a shame that seasonal businesses will be dealt a huge blow, I would be more apt to play it safe with employees and guests. A bank will understand the late or non-payments, the families of dead people won't forget. I really wish there was an alternative, a magic cure-all.
If only it was as simple as the bank will understand. Unfortunately, the banks have to abide by banking regulations and those unpaid payments will put those loans into non-performing status, decreasing the banks reserves. If the bank has a large number of these non-performing loans, which is likely for the community banks in seasonal tourist areas, they run the risk of being declared a failed institution and have their assets (the loans) liquidated. Even worse, the value of those businesses are likely to have fallen by 25% or more, erasing the equity those business owners have in the business and making refinancing those loans impossible. Unlike retirees who really haven't lost anything but time in the shutdown, or employees who will either return to their job in a few months or will find other employment should their jobs not return, many seasonal business owners are likely to lose their businesses and their life savings. For those people that is a staggeringly high price to pay in the interests of possibly preventing the spread of a virus we still have no idea of it's actual morbidity.
