COLLEGE STATION, Texas — With the state of Texas entering phase one to reopen its economy at the end of this week in addition to President Trumps’ new $484 billion stimulus package, small businesses may be able to bounce back from this pandemic.
The most recent coronavirus stimulus package passed by the government is meant to continue helping small businesses and hospitals. The previous package with the same intentions had run out of funding.
“Small businesses have been hardest hit by this crisis because they lack the financial preserves to sustain ongoing expenses during extended periods of downtime," said Texas A&M University Mays Business School Associate Professor, Michael Howard. "It’s probably contributing to the 1.3 million unemployment claims we’ve seen in Texas since March 14, which is really over 9 percent of our statewide workforce. So the recently passed legislation most importantly helps fund the Paycheck Protection Program."
This paycheck protection program is designed to address the needs of small businesses, offering loans for payroll, rent, mortgage, and other expenses.
“On a local basis, the state of Texas benefited greatly from the original funding. Texas received the greatest number of loans of any state, over 134 thousand loans which is about 28.5 billion dollars," said Howard.
Howard says Texas businesses were proactive in pursuing this funding. The phase 1 recovery will also allow revenue streams for small businesses to start up again.
“I think businesses have been doing well to stay in contact with their local consumer base and so we’ve seen a great deal of loyalty among consumers in helping with restaurants, boutiques, and other businesses, and I think we all sense that we’re in this together in that quickly go back and provide business to these small companies, so they can recover quickly," said Howard.
Howard said with the state opening back up, we should begin to see the number of unemployment claims decline but it will be a gradual process.