Our small towns have been hit hard with the coronavirus.
Not the virus itself.
Our COVID-19 numbers have been low for quite some time. As of press time, there have been 13 cases identified in Fillmore County and two cases reported in Houston County. With an average of 25 people per square mile in Fillmore County and an average of 33 people per square mile in Houston County, social distancing comes natural. And, I think that the residents in our rural area have taken this virus very serious, doing everything they can to prevent transmission.
It’s our small towns, and particularly small businesses, that have been hit hard by Governor Walz’s executive order to close non-essential businesses – which has continued for nearly two consecutive months. As of today, the State of Minnesota is still under a Stay Home Order that started on March 27 and has been extended multiple times (now until May 18). Usually, every Thursday before the next executive order will expire, we’ve been hearing that it will be extended another couple weeks.
There are two things that keep our economy alive and well in rural Southeast Minnesota – agriculture and tourism. Right now, they’re both facing their challenges.
And, while the weather has been on our side for both tourism and agriculture, the coronavirus has disrupted life as we know it in ways we could have never imagined.
As the days, weeks, and months slug along, small business owners are feeling continuous financial pain while at the same time watching as big business lives by a different set of rules.
On Friday, April 3, 2020, the Paycheck Protection Program was unveiled, offering $349 billion in free money to small businesses to keep Americans employed. The plan came together rather quickly, with the Small Business Administration processing the equivalent of 10 years worth of loans in 14 days. There were a total of 1.7 million loans processed with the help of more than 4,700 lenders.
On Monday, April 6, 2020, it was reported that Bank of America had already consumed $36 billion (more than 10%) of the total available funds. Wells Fargo was capped at $10 billion due the Feds punishing their institution for fraudulent charges in recent years.
Banks were in line. It was a first come first serve program.
Meanwhile, at a local level, community banks like First State Bank of Fountain, Root River State Bank, Rushford State Bank, Home Federal Savings Bank, Minnwest Bank, First Southeast Bank of Harmony/Canton, Merchants Bank, F&M Community Bank, First State Bank Minnesota, Bank of theWest, and Bremer Bank scrambled to do their part to secure PPP loans for their commercial banking customers. They wanted to make sure the businesses they worked with were still in business a year from now. And, at the same time, they wanted to keep people employed and keep our small town economies as stable as possible. The PPP loans presented a lifeline, and our local community banks deserve a lot of credit.
While so many small businesses benefited from this program, unfortunately there wasn’t enough money to go around.
Of the $349 billion, according to Morgan Stanley, at least $234.4 million went to publicity traded companies. The program was designed to help our nation’s small mom and pop shops. But, there were companies like Fiesta Restaurant Group, with a market value of $189 million and more than 10,000 employees, that received $10 million. That’s one of many.
From what I’m hearing, it’s the small businesses that have operated with only one or two proprietors that have received the least amount of help. For whatever reason, they didn’t qualify for a PPP loan. And, it is disheartening to see small business owners working for free just to keep the mortgage and utilities paid.
Hopefully, the second round of $175 billion PPP loans benefited more businesses with less than 50 employees.
Small town survival
I’ve heard it time and time again lately.
You can go to Walmart, Menard’s, Target, or any other big box store in big cities like Rochester, Minn., and purchase non-essential items, but you can’t walk into a retail shop in any of our small towns and purchase the same items. Some local business owners have pointed out that there are more people walking into a Walmart in Rochester in one day than any of these small town businesses over the course of an entire year.
For many small town business owners, they feel like it is an unfair playing field – more than usual.
Think of every type of business that Walmart competes with in any given market: groceries, sporting goods, electronics, clothing, hardware, lawn and garden, and the list goes on.
Consumers can walk into a Walmart or Target store, touch all of the merchandise, and make their purchase at the checkout. Meanwhile, our small town retail shops have to bring items out to the curb. Consumers are not allowed to walk into the stores to look at products before making purchasing decisions. So, the retailer has to bring items out to the curb until the consumer selects which items they want to purchase.
It does seem like the cards are stacked against our small business owners in this situation, doesn’t it?
I think we need to consider whether policies are administered in a fair and equitable manner. We need our small businesses to thrive in order for our small towns to survive.