- New survey by Main Street America indicates 7.5M small businesses may close permanently due to COVID-19 disruption
- More than 90% of +5,800 businesses have less than 20 employees
- Federal government trying to mitigate toll on small businesses via low interest and forgivable loans
Main Street America is a network of +1,600 commercial districts throughout the country representing some 300,000 small businesses. In its most recent study that polled over 5,800 small business owners, Main Street America found that almost 7.5M small businesses may have to close if the coronavirus pandemic continues to spread at its current rate for up to five months.
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Asked, “If business disruption continues at the current rate, how soon will your business be at risk of closing permanently?” Small business owners replied…
- 6% – less than one month
- 3% – 1-2 months
- 1% – 3-5 months
- 6% – more than 5 months
- 4% – not a concern
These percentages translate into 3.5M small businesses closing permanently in the next two months and 7.5M small businesses closing over the next five months.
Asked, “How has your business revenue changed since COVID-19 became a widespread concern in early March?” Small business owners replied…
- 9% – decreased by more than 75%
- 3% – decreased between 50% – 75%
- 8% – decreased between 25% – 50%
- 1% – decreased by 0 – 25%
- 5% – business has been normal
- Total 1.5% replied that business revenue has increased
Such revenue drops are staggering and as a result, 8 of 10 businesses have already closed temporarily due to the coronavirus crisis.
Asked, “How many of your employees are at the risk of unemployment and/or layoffs as the result of the coronavirus?” Small business owners replied…
- 5% – 0 employees
- 4% – 1 – 5 employees
- 9% – 6 – 10 employees
- 2% – 11 – 20 employees
- 1% – more than 20 employees
These percentages translate into approximately 35.7M workers who are at risk of losing their jobs. Almost 75% of business owners responded that at least one of their employees could lose their job and that 85% of businesses with five or fewer employees responded that 1-5 workers were at risk of unemployment.
Already as of April 14, we have seen nearly 17M people file for unemployment insurance benefits in just three weeks.
Loan programs under the $2.2T Coronavirus Aid, Relief and Economic Stress Act signed into law March 27 do offer $349B in forgivable loans to small businesses via the Paycheck Protection Program and the expanded Economic Injury Disaster Loan Program offering up to $10,000 in emergency grants. The problem, however, is that these programs (and others) have been plagued by delays in application processing and fund delivery and have yet to offer small businesses any tangible relief from this catastrophic crisis.
Thanks to CNBC and Main Street America.
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