Dealing with the coronavirus crisis requires public officials to make decisions that try to save lives without wrecking the economy. It is the case here in Terrebonne and Lafourche as it is across the state, nation and world.
It’s a difficult balancing act, and saving lives obviously demands top priority. Amid the fallout, some economists have said there is a high probability that mass closures, plant shutdowns, social distancing and a host of actions aimed at slowing the deadly virus’s spread could be severe enough to cause a global recession.
Small businesses in Louisiana can get some relief after Thursday’ announcement that federal disaster loans will be available to help Louisiana’s 440,000 small businesses deal with financial losses.
“Our hope is that these SBA disaster loans will be an important part of sustaining their businesses and providing support to their employees who make up over half of Louisiana’s private-sector workforce,” Gov. John Bel Edwards said in announcing the action.
It’s probably going to take a lot more than loans to help many small businesses survive.
Stephen Waguespack, president of the Louisiana Association of Business and Industry, puts that into perspective in a column published Thursday by The Courier and Daily Comet.
“Will there be any small businesses left when this is done? I know it sounds alarmist, but the question is absolutely legitimate,” Waguespack wrote. “Talk to any mom-and-pop restaurant or store owner and they will tell you we are in a crisis. The festivals and cultural events that drove their markets have been canceled. The students who used to be their customers have returned home. Their ability to serve customers inside their own establishments has been banned. Their employees are like family to them and they are desperately trying to do what is right by them, but profit margins for many of these entities average about one to two percent, and there is simply no cash flow available to pay bills and wages. The rent is due, and their supply chains are disrupted.”
Waguespack suggests that state and federal lawmakers are going to have to enact bold and creative actions to prevent many small businesses from going under.
“Tax credits that can be used down the road are nice, but they don’t help much when cash flow is nonexistent since the government has shut down your business and banned your customers from coming to see you,” he said. “Low-interest loans only help so much when the loans you already have to operate your low-margin business are overdue.”
Look for more actions from Congress soon. In the meantime, those with the means to do so can help by patronizing local businesses whenever possible through this crisis. Buy a drive-through meal from a local restaurant. Purchase a gift card you can use when the business opens later.
It’s often said that small businesses are the backbone of any community, a major source of jobs and economic vitality. Ensuring they can sustain themselves through this pandemic will be essential to Houma-Thibodaux’s long-term recovery.
– Editorials represent the opinions of this newspaper and not any single individual.