‘Too small to fail’ an opportunity for New Mexico

Small businesses are in COVID-19 quicksand. Owners and employees face an impossible adaptation of their business model as directed closures force many “nonessential” businesses to completely shut down. Revenue is in free fall for the rest, despite community calls for conscious consumerism like buying gift cards.

The snowball effects of small-business collapse will devastate New Mexicans. Owners who will lose everything are far outnumbered by those who depend on them.

According to the Small Business Administration, more than half of working New Mexicans are employed by small businesses. As we slide further into recession, layoffs will continue. Unemployment will climb. The checks coming to Americans from the stimulus package will not be spent at closed businesses.

Low-interest loans have been pushed by the SBA and now $500 billion has been included in the coronavirus stimulus bill. Loans can be forgiven if a business uses funds to rehire employees during the first eight weeks. Economic impacts are projected to stretch on for months or over a year.

As small businesses struggle to survive the recession, a loan is yet another long-term payment for small businesses in a future of uncertain consumer spending. Payroll will stay switched off for those who have closed. For owners who take them, a loan might only be a stay of execution.

If there’s one major positive to the pandemic, it is the reemergence of a rare unity in our response. Lawmakers in Washington across the spectrum have shown surprising overlaps in proposals. It took a national emergency — a wartime scenario — to break the polarization and jump-start a collaborative policy movement. And where the federal government and White House have failed to lead or been slow to act, governors like our own Michelle Lujan Grisham have refused to wait.

Our governor took the initiative to close schools, offer help with child care and provide meals for families and seniors. Proactive measures mitigate the spread and the damage. New Mexico could now set an example in small-business support and originate new models for statewide economic recovery.

What would a post-COVID economy look like in New Mexico if our small businesses could resume operations without the added burden of survival loans? It might make the difference in the fragile restart.

Business survival rates in New Mexico could lead the nation. Wages could increase, businesses would have the psychological security to innovate, grow and diversify their models. As much of the country works to restore its old economy, we could continue the momentum of tech and creative industries to define our new economy — one less reliant on federal government and fossil fuel production.

The fear cycle of the market will leave a wake of destruction. No single policy or program will spare us. It’s a matter of who suffers and how much. Like emergency medicine, saving lives and businesses now will have economic health consequences in the future.

Federal relief payments will increase the federal deficit; state spending will pull from planned growth on the permanent fund. But this is an emergency. We have rainy-day funds for a reason. How can New Mexico supplement federal aid with creative, targeted programs that speak to our particular resources, industries and challenges? How can we give our economy a head start?

As we enter an unpredicted financial crisis for a very different reason than the 2008 crash, we have an opportunity to rebuild with a new philosophy. This time, it’s a “real economy” crisis. Main Street needs serious help. New Mexico can expand its leadership into bold new models of economic survival, recovery and futurism.

Travis Kellerman is an entrepreneur and tech adviser based in New Mexico. He previously served in policy and campaign positions for U.S. Sens. Martin Heinrich and Tom Udall.