Economically, there might not be a group more adversely affected by the COVID-19 pandemic than small businesses. Countless small businesses have struggled and many have closed since March.
According to Ahmad Goree, lead economic development specialist for the area office of the Small Business Administration (SBA) in Fort Worth, many area businesses have already applied for and received governmental assistance.
“In Dallas County so far, 7,700 small businesses were approved for PPP [Paycheck Protection Program] loans between $150,000 to $10 million,” Goree said. “It helped save 433,000 jobs. When we narrow it down to Irving, 762 businesses were approved, which helped save about 46,093 jobs.”
The Paycheck Protection Program was part of the Coronavirus Aid Relief and Economic Security Act (CARES Act) which was enacted in early July. One program the SBA continues to offer is Economic Injury Disaster Loans (EIDL). As of June 21, nearly 150,000 EIDL loans had been issued for around $9.6 billion.
The SBA is currently offering EIDL loans with terms of up to 30 years and interest rates of 3.75 percent for a for-profit business and 2.75 percent for a non-profit with the first 12 months deferred.
For round one of the PPP, Texas issued just over 372,000 loans for $40.5 billion, ranking second in the nation, behind only California. Small businesses owners can also contact their county governments as many counties, including Dallas County, have their own programs to assist small businesses.
Tom Sullivan is vice president of Small Business Strategy for the Washington, DC-based U.S. Chamber of Commerce and he sees small businesses in certain industries being impacted more than others.
“It really depends on what type of business you’re in,” Sullivan said. “The closer you are directly to consumers, the harder you’ve been hit. The service industry is doing much better. Our last study shows over 80 percent of small businesses either reopened or are in some stage of reopening. That means they’re getting revenue from customers. We’ve still got a long way to go though.”
Sullivan added that many small businesses, 53 percent, are optimistic about 2021 while 55 percent say they’re surviving. However, that number is 14 points below where it was in 2019. Over 50 percent of small businesses say it will take longer than six months to get back on track. But one recent trend among small businesses warrants serious discussion, according to Sullivan.
“Not only is it the type of business, but it’s the social demographic of who owns the business,” Sullivan said. “We see Black-owned small businesses getting hit the hardest, and we also see that minority-owned small businesses are closing at a higher rate. I think it’s 66 percent of minority-owned small businesses believe they’re going to shut down permanently. That’s compared to about 57 percent of non-minority small businesses. We have 13 percent of minority-owned small businesses that can’t get a loan compared to eight percent of non-minority-owned small businesses.”
However, in the region he helps oversee in North Texas, Goree has not seen those trends among area small businesses.
“This pandemic has not discriminated against any type of business,” Goree said. “Every business in every industry run by every ethnic group is really experiencing difficult times. There’s 30 million small businesses in the United States and just about all of them have been impacted negatively.
“There’s 68 SBA offices across the country, and in my district, we cover 72 counties and we have about 900,000 small businesses. We’ve probably communicated with about all of those from the start, and they are all hurting.”
Charlene Stark directs strategic initiatives for the Irving-based North Texas Commission and has seen silver linings for area small businesses amid the pandemic.
“There’s been some innovation,” Stark said. “There are some restaurants that have been proactive in marketing their delivery services or their partnership with Doordash and Grubhub and really made the takeout experience seamless.”
Besides the obvious economic effects of small businesses struggling has on their owners and employees, there is another effect many forget about.
“Small businesses are the soul of so many different communities, and when one goes down, there’s a ripple effect,” Sullivan said. “Employees, other businesses and the community overall suffer not just on the economics, but from an emotional perspective.
“Whether it’s a coffee shop that was a meeting place or some local, independent grocery store those are all the unique characteristics of small businesses on Main Street that we have this emotional bond to. When they’re gone, no one really knows what impact that’s going to have on the emotional nature of a community.”
However, Stark offers a simple tip for how residents can do their part to help local small businesses that might be struggling.
“People’s behavior has changed, and we can be intentional,” Stark said. “Think about when we want to go out and get a meal, supporting the locally owned businesses. It’s really important for all of us to be intentional.”
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