If you haven’t yet applied for a PPP (Paycheck Protection Program) loan, you may still have a shot. However, that shot is going to miss its target if you don’t act now–and I mean now.
Let me explain: The initial iteration of the program ran out of its $350 billion of funding almost immediately, and small businesses that weren’t funded initially have been cooling their heels since then. Congress, happily, has since reloaded the program with billions more dollars, which become available to the online system used by banks Monday morning (April 27) at 10:30 a.m. Eastern time.
So, please: If you need some of that money, get your applications in now.
Before I go any further, I need to caveat everything you just read, and everything you will read in the rest of this article, quite vehemently. I am neither a financial nor a legal professional. (My subject matter expertise is quite different: I’m a customer experience expert consultant and I emphatically do not do financial consulting.) The information in this article is gathered from sources I believe to be reliable, but I may be wrong about this and/or, as a layperson, I may have misinterpreted it in my summary below. Furthermore, much of the information from the government itself is still unclear or in flux, so that’s another variable to be aware of.
Where not to apply
Where should you apply? Well, first, here’s whom to avoid: the big banks, most specifically (I have heard), Chase, which has developed, deservedly or not, a spotty reputation for how it handled applications initially, and which is now brazenly warning even existing applicants that they should probably look elsewhere.
Where to apply
To give credit where credit is due (see what I did there?), smaller regional banks and credit unions did a great job the first time around, and are where I’d ideally suggest you go this time around as well. However, they are, by and large, only accepting applications from their existing banking customers, and, like everyone else in this landscape, they expect any new money to evaporate soon.
If you don’t have an existing relationship with one of these regional banks or credit unions, are you out of luck?
With them, probably. But, in a heartening development, fintechs (online not-quite-banks) have been approved to give out PPP loans as well. You can apply right online with
• Square Capital (the Square cardreader/merchant services people). Note: this link only works if you have an existing account with them.
What else do I need to know about the PPP?
• If you apply for more money than you actually can use on payroll or other permitted expenses in the 8 weeks after you get the loan, it will be turned into an extremely low interest loan, rather than being forgiven. The rule of thumb here is an important one: don’t bend too far over backwards to try to get a huge PPP loan; sensible business operations are what matter most in this challenging time.
• However, there are intelligent ways to make sure you use as much of the loan as makes sense, in ways that can achieve forgiveness. Once you get your loan, be sure to read this article on how to have the best shot at 100% loan forgiveness.
Are there programs other than the PPP that I should be applying for?
Definitely. First off, the EIDL (Economic Injury Disaster Loan).
While the SBA website for this currently says that there has been a lapse in funding, the funding should be restored presently. This money is quite wonderful in that there is no expectation of repayment.
Also consider local and state programs, whether COVID-19 specific or pre-existing.
Finally, there are some novel opportunities out there. For one, Facebook is giving grants to small businesses within the locales where they have offices.
For further reading
This is the fourth article on government loans that I’ve written recently. Again, all of these articles are based on my understandings/my interviews with professionals. I am not, myself, a financial or legal professional.
• For a broader overview, read this.
• For a bit more info on the fintech aspect, read this.
• And, again, very important: Once you get your loan, read this for information on how to achieve as close to 100% loan forgiveness as possible.
Oil's rally hinges on what happens at next OPEC+ meeting – BNNBloomberg.ca
Oil closed at the highest level since early March, buoyed by optimism that OPEC+ will rebalance the market. But the rally could turn on what happens at the alliance’s June meeting.
The producer group reached a preliminary agreement Wednesday to extend historic output curbs for an extra month, with Saudi Arabia and Russia drawing a hard line on cheating, and insisting that countries make up for past non-compliance by deepening future cuts. Their stance injects some uncertainty into the market, which has rallied from historic lows but remains vulnerable to ongoing demand weakness and a persistent supply glut.
In the U.S., the outlook for fuel consumption dimmed after U.S. government data showed that diesel demand fell to a 21-year low last week while inventories rose to the highest level since 2010. Gasoline supplies also swelled, suggesting consumption isn’t rebounding as quickly as initially thought. The builds in fuel stockpiles offset a larger-than-expected decline in crude inventories.
Futures in New York fluctuated between gains and losses amid the conflicting market signals. While West Texas Intermediate crude ended the session one per cent higher, prices declined after the close.
“We’re in wait-and-see mode,” said Michael Lynch, president of Strategic Energy & Economic Research Inc. The question now is not whether OPEC+ will extend cuts but by how much, he said. “If they extend until the end of the year, that will encourage optimism on the part of buyers.”
Russia and Saudi Arabia, the de-facto leaders of OPEC+, are putting pressure on Iraq, Nigeria, Kazakhstan and Angola to make firm commitments they will improve compliance, and also to make up for past wrongs. The OPEC+ leaders are demanding the four countries compensate for non-compliance in May — and potentially in June — by cutting extra in July, August and September, according to the people familiar with the situation. That’s a painful prospect for those producers, already struggling with the budget impact of low prices.
The ultimatum comes as higher prices have already spurred some U.S. producers to bring wells back online. EOG Resources Inc., America’s largest shale-focused producer, and Permian producer Parsley Energy Inc. both said they’re preparing to ramp up output just weeks after turning off the taps.
• U.S. West Texas Intermediate rose 48 cents US to settle at US$37.29 a barrel in New York.
• Brent rose 22 cents US to US$39.79 a barrel in London. The global benchmark crude had earlier topped US$40 for the first time since March.
The OPEC+ leaders expect to hold a meeting on June 10, according to people familiar with the matter. But negotiations continue with the aim of simply ratifying the accord at the virtual gathering, according to the people.
–With assistance from Olivia Raimonde, Grant Smith, Javier Blas and Evgenia Pismennaya.
Dow Notches Third-Straight Win as Bets on Faster Economic Recovery Continue – Investing.com
By Yasin Ebrahim
Investing.com – The Dow climbed for the third-straight session as hopes of a faster economic recovery were given a boost on Wednesday amid signs the Covid-19 pandemic’s grip on the economy has passed.
The rose 2.05%, or 527 points, the gained 1.36%, while the added 0.78%.
With just days to go until Friday’s crucial nonfarm payrolls report, ADP (NASDAQ:) said that private payrolls fell by 2.76 million jobs in May, confounding economists’ for a drop of 9 million.
That marked a significant improvement from the 19.5 million job cuts seen in April, raising hopes the labor market losses have bottomed.
The services sector, which accounts for about two-thirds of overall economic growth, is also showing signs of life, with activity rising from the lowest level in 11 years in April.
data for May showed a reading of 45.4, above forecasts for a reading of 44.
The duo of upbeat economic reports stoked investor hopes of a quicker economic rebound, underpinning cyclical sectors like financials and industrials.
Financials jumped 4.4%, with banks leading the charge. JPMorgan (NYSE:NYSE:) was up 5.4%, Bank of America (NYSE:NYSE:) up 4.5% and Citigroup (NYSE:NYSE:) up 4.9%.
In industrials, Boeing (NYSE:) rallied 13% after reaching a compensation package and a new delivery deal with travel company TUI Group over the grounding of its 737 Max planes.
On the earnings front, Zoom Video Communications (NASDAQ:) jumped 6% after reporting first-quarter results that markedly beat expectations on the bottom and top lines as the pandemic spurred demand for its videoconferencing software.
Canada Goose (NYSE:) rose 18% after reporting a better-than-expected fiscal fourth-quarter profit. The outerwear retailer also said it would increase focus on direct-to-consumer sales in the early stages of the reopening phase.
Elsewhere, Warner Music (NASDAQ:) made a bright start to life as a publicly-traded company, rallying 21%. The music label company had priced its offering of 77 million shares at $25 per share.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
2 Stocks to Buy and Hold Forever – The Motley Fool Canada
For part-time investors, it can be difficult to stay on top of your portfolio holdings. This is especially true during times of significant volatility. It is why investors should choose which stocks to buy carefully.
If you don’t have the time to actively monitor your positions, owning over 50 stocks may not be the right approach. If you are holding a large portfolio in an effort to diversify, you may be over extending yourself.
The purpose of diversification is to reduce unsystematic risk. Research has shown that the benefits of diversification tops out at around 30 positions. The diversification benefits only inch up marginally for every position added afterwards.
Keeping all this in mind, what is the best approach for the part-time retail investors? Identify stocks to buy that can be held forever. These are best-in-class, blue chip stocks that will act as foundational stocks in a portfolio.
Railway stocks to buy
The railway industry is dominated by two players, Canadian Pacific Rail (TSX:CP)(NYSE:CP) and Canadian National Railway (TSX:CNR)(NYSE:CNI). They form a duopoly and as such, have some of the widest moats in the country.
Although both make excellent investments, the top stock to buy today is CN Rail. The railway is trading at 4.47 times book value, a steep discount to peer CP Rail (6.73). CN Rail’s debt burden is also much less, with a debt-to-equity ratio of 0.79. For its part, CP Rail’s D/E ratio is sitting at 1.28.
Similarly, CN Rail is a Canadian Dividend Aristocrat. It has a dividend growth streak that spans 24 years, the tenth longest in the country. At 1.94%, the yield is also double that of CP Rail (0.94%). Over the past decade, CN Rail has averaged 15.6% annual dividend growth.
Looking forward, analysts are expecting a down year in 2020 – not surprising given the current pandemic. Still, the company is only expected to see earnings dip by about 8% before rebounding in a big way (+17%) in 2021.
CN Rail is one of the safest stocks to buy. You can buy without having to check up on the company daily to see if the investment thesis has changed.
A top bank
In today’s environment, financial stocks are under pressure. Not even Canada’s Big Banks are immune, and most are sitting on significant losses. However, recent results are proving once again that Canada’s banks are resilient and are top stocks to buy — perhaps none more so than Royal Bank of Canada (TSX:RY)(NYSE:RY).
As Canada’s largest bank, it has the means to come out on the other side of this pandemic on solid footing. Just as it did during the Financial Crisis, it appears that RBC will escape the current pandemic with a dividend cut.
Now yielding 4.84%, investors can lock in a yield close to record highs. During this pandemic, Royal Bank has been the best-performing bank. Despite losing 13.06% of its value, it is far outpacing the majority of its peers.
Despite bouncing off March lows, Royal Bank is still trading at only 1.6 times book value and 11.44 times earnings. Both of which are below historical averages.
RBC is proving once again to be a top stock to buy and is one of the best hold forever options for investors. Unless the entire economy and banking system goes belly up, investors can sleep well knowing Royal Bank is anchoring their portfolios with stable and reliable returns.
If you are looking for other top stocks to buy today, check out the attractive investment opportunities.
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
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Fool contributor Mat Litalien owns shares of Canadian National Railway. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends Canadian National Railway.
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