The U.S. stock market has lost 10,000 points in the last six weeks. Analysts suggest more than 3,000,000 Americans filed for unemployment last week. Concerns about the coronavirus, and the measures aimed at slowing its spread, are hitting small businesses hard.
During a COVID-19 update Sunday afternoon, Governor Greg Abbott stressed that people should stay home unless they have a specific need to go out. Last week Abbott issued an executive order that closed bars, dine-in restaurants, and gyms. And he limited gatherings to fewer than 10 people. Sunday he did give Texans one reason to venture out.
“We strongly urge you to patronize your local restaurants through take out or delivery or whatever source you can so that we can continue that as a very important food supply source.”
While many grocery stores have been struggling to keep up with demand, many other businesses including restaurants report that their sales declined between 20% and 50% last week. That’s prompted some to announce they’ll close at least for a couple of weeks.
The Abilene Chamber of Commerce sent a survey last week to its 1,365 local small business members, asking how COVID-19 is affecting them. Chamber President and CEO Doug Peters says the entrepreneurial spirit is serving small business owners well during this difficult time. But he says it’s already hard on them.
“I can’t think of anybody who’s immune to what’s going on. That’s why we as a community have to do everything we can, within reason, and with the proper precautions to help keep our business community afloat.”
While Peters says they would hope nobody has to lose a job during this crisis, the reality is that small businesses need the support of the community, as it follows the recommended guidelines on social distancing, hygiene and limiting the size of gatherings.
Governor Abbott has taken steps aimed at supporting local businesses. On Friday Abbott announced that the U.S. Small Business Administration had approved his economic injury disaster declaration for Texas. Doug Peters says that’s very good news.
“Access to the Economic Injury Disaster Loan Fund, through the U.S. SBA, is the single most relevant and important tool available to businesses right now.”
Small businesses in the state can now apply for loans of up to $2,000,000, at an interest rate of 3.75%.
Peters says he recommends all of his members fill out the brief application to at least get in line. The loans can be used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the disaster's impact. Borrowers can re-pay the loans over a maximum of 30 years.
Late Sunday negotiations in the Senate broke down on a package that included more than $300 billion in extra funding for the Small Business Administration, targeted to relief for businesses impacted by the pandemic.
Last week President Trump signed a law requiring small employers to provide paid-leave during the crisis, it includes new tax credits and federal payroll-tax relief to pay for those mandatory benefits.