Insight during these difficult times



I hope you and your loved ones are doing well in these uncertain times.  Being in California, one of the most affected states by Covid-19, my employer, Providence Capital, has made significant changes to our work schedules to provide optimal social distancing.  We are operating half days in the office with a minimized staff, and half days from home.   There has been a transition phase to implement this, which is done, and we are operating at full-strength.  Business is slightly slower, but still very active.


Many of my customers and vendors have been calling to ask what I’m seeing in the business finance sector.    There has been a LOT of economic volatility in the past 3 weeks: Plummeting oil prices, stock market massive gains and losses (mostly the latter), mandatory industry shut downs are crippling small (and large) businesses in certain sectors, FED rates have dropped to 0 while mortgage rates have been all over the place, business relying on overseas materials have been dealing with major delays. It’s basically a whole different world.


From our portfolio and funding side, the most negatively affected have been our service-related industries such as restaurants, movie theaters, breweries and wedding venues.   The most resilient have been our construction, transportation and manufacturing.   Likely because many of these industries are operating on contracts which have been inked to prior to the COVID-19 outbreak.  Certain lenders have pulled approvals on industries that are flooding them with defaults and forbearance requests.  I have been experienced this first hand on several larger transactions, to the dismay of several customers.


After experiencing the 2007-2009 recession in the financial sector, which had commonalities and differences to the current economic climate, the key is to hustle harder during this time and not get caught up in the small details and negative news.  Take a break from CNN.   All things will pass and the overall economic foundation for US businesses and banking is very strong.   There is a lot of panicking (justifiably), but if you can step back and assess your game-plan, there is always a solution.  Possibly even opportunities.


Our company has been around for almost 20 years and been through much more than this current outbreak.  The dip is lower, but the end and return to normalcy should be sooner.   If you do have an emergency fund or are operating seamlessly, this could be the BEST time to secure financing from refinancing homes, to cars to equipment leasing.   The lenders are all more stringent on who they will approve, but good credit is being rewarded with even better rates.  There are also new programs in place to remove lenders fees and lower upfront payment.


If you have any questions or transactions to discuss please contact me via email or directly at (714)985-6207. Wishing you all the best, please stay safe and enjoy the extra time with your families.


Best Regards,

Alan Johnson
Providence Capital Funding Inc.
T 714-985-6207 | F 714-986-1225
[email protected]