In the era of lockdown and economic collapse, not all small businesses are equal.
Across Texas, owners of small engineering firms, retail shops, restaurants and countless other enterprises were in a Darwinian scramble to stay afloat in recent days as they competed for a piece of a massive federal forgivable loan program to help keep employees on staff and fend off further economic meltdown from the COVID-19 pandemic.
But the capacity of businesses to swiftly secure that money often depended on their financial sophistication and the support of high-priced accountants, bankers and attorneys. And on Thursday, the money ran out.
Texas small-business owners interviewed by The Texas Tribune described the process as evolving and confusing. Now that the fund is depleted, it is existentially terrifying.
“You are flying solo. ... It’s basically beating on the door," said Tamara Morton Johnson, a chemical engineer with a small business tied to the oil and gas industry in Houston. "Each bank has its own rules and its own guidance."
Such a conundrum was not the intent of the legislation that created the program and illustrates the scale of havoc the new coronavirus has wreaked on American life.
The primary objective of the loan program was to move as much money as quickly as possible into the hands of small-business owners. As part of the $2 trillion CARES Act, congressional leaders and Trump administration officials set aside almost $350 billion for small-business owners in forgivable loans.