HOUSTON - When Hurricane Harvey hit Texas, four years ago, it left $125 billion dollars in damages. With that, and more disasters to follow, struggling small businesses have been left with few options to survive.
Now, a new Texas law, and proposed federal legislation, could offer a helping hand. SB 678 got bipartisan support, when it passed the Texas legislature, in the last session.
Modeled after a Florida law, it sets the framework for emergency small business bridge-loans, up to $50,000 dollars, to help make ends meet. Federally, the proposed LIFT UP Act could make emergency assistance, that's taken on by those small businesses, more help than a hindrance.
Janice Jucker, of Three Brothers Bakery, jokes she and her husband, Bobby, are the king and queen of disaster.
"We've been through four floods, a fire, a hurricane, pandemic, and a freeze," she half-heartedly jokes.
Those disasters have left the business with hundreds of thousands of dollars worth of emergency loans, used to rebuild and reopen. It'll take a lot of pastry, however, to pay that money back because the government assistance comes with a catch.
The simplified explanation is that, in good times, healthy businesses can get loans designed to help them grow. That debt can be forgiven for up to nine months before payments must begin.
In contrast, 'Economic Impact Disaster Loans' designed for businesses in trouble, any deferred payments include interest that starts adding up immediately.
"A lot of small businesses that have these loans didn't even realize that the deferments were accruing interest, which is creating a deeper hole," says Jucker, "It's making it worse."
The LIFTUP, or "Loan Interest Forgiveness for Taxpayers Under a Pandemic' Act, was introduced in Congress by Texas lawmakers Lizzie Fletcher and Michael McCaul. It would provide those disaster loans with the same, and better, terms that healthier businesses get.
Essentially, it would require repayment, without adding heavy interest fees when businesses are least able to handle it, and potentially lighten the debt load that gets in the way of being able to grow and survive.
"It's a tsunami of a problem, getting ready to happen," warns Jucker, "I think it's going to slow the economic recovery of America."
Texas SB 678 creates a framework, for emergency loans, but state lawmakers still need to decide the source of funding.
Meantime, LIFTUP was introduced in February and is still in the hands of the House Committee on Small Business.
In a statement, Rep. Fletcher, who is heading the effort, says, "It is a common-sense and meaningful way to help alleviate our small businesses’ financial burdens during this challenging time."