TYLER, Texas — Small business owners around East Texas are trying to keep their companies open, both for their customers and their employees.
“The majority of our small business members that I’ve spoken to, in order to stay open, have had to make the tough decision to let a couple people go, to furlough some employees,” Annie Spilman, State Director for the National Federation of Independent Business, said.
Every empty parking lot along a busy road represents another small business fighting for its life.
“I had one woman call that said, in the 27 years she’s been in business, she’s never had to let a soul go, and she’s already had to let about five people go,” Spilman mentioned. “And I think she’s got 11 on staff currently.”
Spilman said the CARES Act, the stimulus plan signed by President Trump, is not just good for individuals. It is also great for small businesses because it includes Payroll Protection Program loans.
“Call your banker right away,” Spilman said, “and let them know that you want to be first in line to apply for these loans; which will cover your payroll. It’ll cover your rents/leases/mortgages for your business. It’ll cover your utility bills and your debt obligations. Therefore, these businesses can now, possibly, stay open and keep people on payroll through these loans that ultimately become a grant, so they won’t have to pay them back.”
Marc Loredo, a commercial banker for BBVA, said the law allowed the Small Business Administration to have until April 6 to finalize the rules for administering the loans. Until they do, business owners cannot submit applications, but Loredo said they should still prepare by collecting payroll records for the last 12 months.
“It’s a lot of really intricate details,” Loredo said, “and I really recommend that you reach out to your banker.”
The PPP loan is in addition to the Economic Injury Disaster Loans the SBA had already announced. Those are more commonly offered after natural disasters, such as hurricanes, floods, and tornadoes.
“And a business or business owner can apply for both, so long as they do not include the same payroll that they would be applying for the PPP loan in the EIDL loan application,” Loredo explained.
While local companies get their paperwork in order, Spilman says there are several things consumers can do to keep them going, such as ordering from restaurants, buying gift cards, and shopping locally whenever possible.
She said 4 million Texans work for small businesses, so they are the key to getting back to normal.
“Small business owners, they’re 250% more likely to contribute to a local charity,” Spilman noted. “You know, they’re the ones that are sponsoring your local soccer teams. And, for every $100 spent at a local business, $68 stays in that local economy, as opposed to only $43 that’s spent at a national chain. I mean, they really are the lifeblood and the engines of our local economy.”
Spilman said she also recommends that small business owners contact their local small business development center, which are partnerships between colleges and the SBA. The Tyler Small Business Development Center is based out of Tyler Junior College. Aside from help filling out loan applications, "they have business counselors there that can help them come up with a plan of action and help them through these tough decisions,” Spilman said.
Spilman added that the NFIB is currently lobbying Gov. Greg Abbott to either sign an executive order or call a special legislative session to waive the franchise tax or create new exemptions because businesses are required to pay that by May.
For workers whose hours have been reduced, she said the Texas Workforce Commission created a shared work program that allows employees to earn partial unemployment benefits to supplement their remaining income.