Survey: One-fifth of small businesses will close if conditions don’t improve
One in every five small businesses say they will not be able to stay open if economic conditions don’t improve in the next six months, and a similar number say they can only last a year.
The survey from the National Federation of Independent Business, a trade group for small businesses, found that while many businesses expected to stay afloat, the pandemic was hitting significant numbers in devastating ways.
“The health crisis is not impacting small businesses equally,” said Holly Wade, NFIB director of research and policy analysis.
The pandemic, she said, was forcing small businesses to adapt to abrupt shifts in consumer behavior, ever-changing information on health and safety and new rules and regulations from varying levels of government.
But just being able to cover their bills remains the central concern. About half of the businesses surveyed had seen a decline of over 25 percent in sales since the pandemic began, and about a fifth have seen sales drop by over 50 percent.
“Many of them still need more financial assistance just to keep their doors open and staff on payroll,” said Wade.
Of the businesses that had taken a Paycheck Protection Program loan — the program offering forgivable emergency loans to help small businesses keep their workers on the books — 84 percent had already used the entirety of the loan.
Almost half, 47 percent, said they would need more help in the coming year, and 44 percent said they would want to apply for a second PPP loan.
The program, however, expired at the end of July, and Congress has failed to agree on a relief package that would extend the program for potential return loans.
Another key controversy in the deadlocked negotiations is the level of unemployment insurance. Republicans want to reduce the $600 in additional weekly benefits that ran from April through July, arguing that it makes returning to work less attractive.
Some 32 percent of the survey respondents agreed, saying the benefit had made it harder to hire or re-hire workers, though 9 percent noted that their customers had more money to spend as a result.
Just over half said they had moderate or serious concerns over legal action related to the pandemic. The GOP has made COVID-related liability a central demand in the negotiations.
The survey, which was conducted from August 17 and 18, included 561 responses and had a margin of error of plus or minus 4 percent.