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Summary
A slide deck titled Womply 2020, updated June 10, 2020, presenting the company's argument that small businesses faced a depression as of March 13 and needed rapid federal and state intervention. It compiles charts and third-party figures on revenue declines, including OpenTable reservations down nearly 80% and Toast restaurant revenue down 45%, along with forecasts of Q2 GDP declines. The deck states that the Phase 3 stimulus relied on the SBA and cites a House Committee on Small Business report on Hurricane Sandy disaster lending, including 46 days average processing and a 24% business approval rate. It proposes pushing government funds through existing private channels such as lenders, banks and card processors. It closes with a methodology note stating that Womply aggregates transaction data from 50+ financial partners with a lag of up to 4 days.
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WOMPLY
2020
Updated Wed Jun 10, 2020 900a Pacific
Read our joint
letter to Congress
(with 20+ other
companies)
Summary of the economic apocalypse
We are in a small business depression as of Friday March 13th
The old playbook won’t save us:
● Monetary policy: Not relevant to small businesses (in short term)
● Demand-side fiscal stimulus (eg writing checks to consumers): Not relevant if businesses are dead or can’t sell goods
and services
● SBA: Cannot handle scale or speed of crisis
Half of America’s businesses will die in the next 60 days without radical Federal and State intervention
The only viable solution is to enlist companies (banks, payment processors, alt-lenders, acquirers) in a
massive public+private effort to inject supply-side stimulus to keep businesses alive. This could be done
within hours or days, using government funds and private data & infrastructure.
If we don’t fix this then millions of small businesses will layoff all their employees, default on their accounts payable, rent, credit
cards, debts, and taxes. This will cause a simultaneous banking and unemployment crisis, which will hit big businesses too.
The recovery will take years because the businesses that are needed to create jobs and get us out of the depression will be
dead.
Small businesses are critical to the US economy
~$10 trillion in GDP
~50% of America’s jobs
Not just restaurants:
● Hotels
● Bars
● Auto-service
● Gardeners
● Pool Cleaning
● Equipment rental
● HVAC
● Bike shops
● Education
● Salons
● Gyms
● Professional services
Updated Wed 6/10
w/ data from EOD
From our best economy ever to a depression in a few days
6/6
Live updates. If data
shows over 100% in
losses, that’s due to
refunds.
Restaurants as of eod 6/6
Updated Wed 6/10
w/ data from EOD
6/6
https://www.womply.com/blog/data-dashboard-how-coronavirus-covid-19-is-impacting-local-business-revenue-across-the-u-s/
OpenTable data shows reservations down nearly 80% in US
Updated Wed 6/10 w/
data from EOD 6/9
Womply transaction
data is three days
behind this chart.
Note that Opentable
doesn’t see takeout
or delivery
transactions (only
table reservations).
https://www.opentable.com/state-of-industry
Toast (POS) shows restaurant revenue down 45% nationwide
Updated Wed 6/10
w/ data from EOD
6/9
Jun 9
https://rallyforrestaurants.com/impact-COVID-19-restaurant-insights.html
Travel & Tourism as of eod 6/6
Updated Wed 6/10
w/ data from EOD
6/6
https://www.womply.com/blog/data-dashboard-how-coronavirus-covid-19-is-impacting-local-business-revenue-across-the-u-s/
Retail shops & Services as of eod 6/6
Updated Wed 6/10
w/ data from EOD
6/6
https://www.womply.com/blog/data-dashboard-how-coronavirus-covid-19-is-impacting-local-business-revenue-across-the-u-s/
Grocery stores as of eod 6/6
Updated Wed 6/10
w/ data from EOD
6/6
https://www.womply.com/blog/data-dashboard-how-coronavirus-covid-19-is-impacting-local-business-revenue-across-the-u-s/
Comparing industries YoY for week ended 6/6
Updated Wed 6/10
w/ data from EOD
6/6
https://www.womply.com/blog/data-dashboard-how-coronavirus-covid-19-is-impacting-local-business-revenue-across-the-u-s/
Business closures by category as of EOD 5/30
Updated Wed 6/10
w/ data from EOD
5/30
https://www.womply.com/blog/report-how-many-local-businesses-have-had-to-close-due-to-covid-19/
As of 6/8 hourly workers were working 33% less than in ‘19
Updated Wed 6/10
w/ data from EOD
6/8
Jun 8
https://joinhomebase.com/data/
~50% of small retailers (6m US jobs!) see huge sales decrease
Survey of 20,000
independent retailers
show situation
worsening quickly
https://blog.faire.com/thestorefront/immediate-steps-for-local-retailers-during-covid-19/
https://www.jpmorganchase.com/corporate/institute/document/jpmc-institute-small-business-report.pdf
Sunday 3/15: Goldman Sachs forecast Q2 GDP down 7.5%
Note the scale
Friday 3/20: Goldman revises Q2 GDP forecast down 24%
Note the scale
Sunday 3/22: Morgan Stanley forecasts Q2 GDP down 30%
People work at businesses. When businesses go under, worker livelihoods are destroyed.
This magical recovery will depend on small businesses
Small businesses will only be
able to create jobs if they
receive effective support in
days not weeks.
The human toll
The collapse of small businesses will:
● Disproportionately harm hourly workers
● Disproportionately harm minority businesses over non-minority businesses
● Disproportionately harm businesses in poorer communities
● Hurt gig-economy workers (particularly those who cannot file for unemployment)
● Hollow out the middle class
https://joinhomebase.com/blog/real-time-covid-19-data/
The Phase 3 stimulus relies on the SBA to support businesses
Here’s the Thursday draft bill. It focuses exclusively on SBA 7(a) loan providers to deliver cash. Gives SBA
30 days to determine rules before they even start accepting applications for capital. No mechanism to use
existing private lenders, banks, or processors to deliver money quickly.
Sunday Update
New drafts: here and here
SBA failed to deploy just $1b effectively during Hurricane Sandy
Hurricane Sandy caused $75b in damage
The SBA was given $779 million to provide disaster relief to businesses and consumers
They received 80,000 total loan applications (from businesses and consumers)
From the Democrats of the House Committee on Small Business Report:
● Application processing delays: 46 days on average
● Low approval rates: 24% for businesses
● Long delays for disbursement (looks like months!?!)
Note that Phase 3 stimulus gives SBA 30 days to set rules for how they will deploy.
The SBA couldn’t deploy more than a few hundred million dollars in months. There is simply no way this
tiny, underfunded agency can deploy hundreds of billions of dollars.
Source: https://velazquez.house.gov/sites/velazquez.house.gov/files/images/SBASandyReport052013.pdf
Maybe the SBA disaster loan process is better now? Don’t count on it
This is one form of many
Womply tried applying for an SBA Disaster Loan
to understand the process and we haven’t
finished it yet because it’s so long.
Applications require:
● Complete company statement of assets
and liabilities
● Complete personal statement of assets
and liabilities for all owners
● IRS forms to request prior tax returns for
key individuals and company
● Disaster relief statement
This is not a knock on the SBA; the agency is
Businesses are
just not built for a nationwide crisis of this scale.
already struggling
The people at SBA are hardworking civil
with SBA
servants, they should should be applauded and
application
supported by all Americans.
https://disasterloan.sba.gov/ela/Documents/Three_Step_Process_SBA_Disaster_Loans.pdf
“47 percent of small businesses have less than 15 cash buffer days1”
1: 2019 Findings:
https://institute.jpmorgan
chase.com/institute/rese
arch/small-business/quic
k-liquidity-to-small-busin
esses-could-mitigate-im
pacts-from-coronavirus
Note this chart is
from 2016. More
recent findings
suggest situation
was worse in 2019
2 Chart from 2016:
https://www.jpmorganchase.
com/corporate/institute/docu
ment/jpmc-institute-small-bu
siness-report.pdf
Businesses in minority communities are likely to have less cash on hand
2019:https://institute.jpmorganchase.com/insti
tute/research/small-business/place-matters-s
mall-business-financial-health-in-urban-comm
unities
Businesses in poor communities have lower profit margins
2019:https://institute.jpmorganchase.com/insti
tute/research/small-business/place-matters-s
mall-business-financial-health-in-urban-comm
unities
Business owners are already impacted
https://www.axios.com/small-business-owners-coronavirus-survey-06e04322-7788-4de4-8216-42b875a39e53.html
What’s the solution?: Push govt money through existing pipes
The only viable solution is to push government funding through existing private pipes (alt-lenders, banks,
processors) directly to small businesses. Trying to move hundreds of billions of dollars through the SBA is
like pushing a boulder through a straw.
Card processors (great companies like FIS-Worldpay, Global Payments-TSYS, Square, Paypal, etc) move
trillions of dollars per year (compare that to SBA…). Alternative lenders have moved over $10b in the past few
years. They have the data and pipes to move money fast in a targeted and completely auditable manner.
Collectively we must provide capital to intermediaries (lenders, banks, processors) so they can rapidly
disburse funds. Here’s our proposal. Here’s a related proposal from Square & Intuit.
We don’t pretend to have all the answers, but we know private companies must be part of the solution.
If we fail at this, we will watch the American dream die in front of us over the next 60 days.
Womply, our partners, and our competitors are ready to help in any way possible.
More info
We are offering complete and free access to our benchmarking data to government, press, and
analysts. Please contact toby@womply.com for help.
More Womply data is available on our blog https://www.womply.com/newsroom/blog/
We launched http://Stimulus2020.com in partnership with other companies to support local businesses.
Email stimulus2020@womply.com for more info or if you want to help.
We will work with anyone to help local businesses during this crisis.
We are tracking the best data sources we know of here
Here are other policy proposals that deserve consideration from John Cochrane, Steven Hamilton
(GWU) and Stan Veuger (AEI), EIG, Kevin Warsh in the WSJ, and Strain and Hubbard.
Methodology for Womply maps & charts
Womply aggregates transaction data from 50+ financial partners in the US. As such we are
uniquely positioned to assess the impact to the US economy amid the COVID-19 health
emergency. This data spans hundreds of business categories in every corner of America.
** Please Note **
- Transaction data comes in various frequencies from financial partners, so our data can be
delayed up to 4 days (post swipe).
- Our window of analysis, as a result, lags 4 days
- To adjust for seasonality, we review the prior 7 days compared to the same week the year
prior
File and source
- File
- deck.pdf
- Size
- 3,691,946 bytes
- SHA-256
- 8f79bbab1912cbe5867192943f213ef7030b7e538392909cc923c1eb9cd14730
- Our copy
- deck.pdf
- Original
- No public link identified.