Key Highlights
- Small Business revenues dropped -52% due to COVID pandemic
- Small Business payrolls dropped -54% due to COVID pandemic
According to a new Small Business Financial Health Survey conducted by Biz2Credit of data examined and analyzed from 300 small business owners who received funding from the small business lending initiative called the Paycheck Protection Program (PPP), year-over-year revenues dropped a staggering -52% while their payroll expenses plummeted -54% in Q2 2020.
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This survey is the first attempt to quantify the impacts of the COVID pandemic on businesses that applied for PPP money.
Here are the most important findings of this Biz2Credit small business survey:
- Average quarterly revenue in Q2’20 was $193,865, a -52% drop from $405,030 in Q2’19
- Average quarterly payroll expenses in Q2’20 was $62,599, a -54% drop from $137,126 in Q2’19
- 60% of businesses were closed for some part of 2020
- Closed businesses experienced drop of -87% in revenue compared to 2019
- Businesses that not closed for some part of 2020 experienced drop of -13% compared to 2019
- LLCs showed revenue decline of -90%, payroll expenses drop of -51% and drop in number of employees of -62%
- Average number of employees dropped from 15 in Q2’19 to 8 in Q2’20
- Just 20% of businesses that HAD to close due to government mandates were offered deferred payment option by their landlord or mortgage company
- Businesses will need to invest some $29,230 in PPE and renovations to deal with COVID-19. This $29,230 translates into -15% reduction in gross margins
- Restaurant industry particularly hard hit by coronavirus.
- For restaurants that stayed open, average Q2’20 revenue dropped -72% and average number of online/takeout orders down -38%
- Restaurants will spend average of $52,106 for PPE, 78% more than for businesses in other industries
- Average cost of recovery for restaurants (PPE + renovations) is $21,553
CEOS of more than 100 companies (Starbucks, MasterCard, Microsoft, etc.) requested that Congress continue federally guaranteed loans into 2021 AND provide flexibility in how that money is used.
The CEOs’ letter to Congress read: “Small businesses are too critical to our country’s economic strength to let fail. From retailers and restaurants to consulting firms and manufacturers, small business owners are facing a future of potential financial ruin that will make the nation’s current economic downturn last years longer than it must.”
PPP funding expired as of August 8. Lawmakers “are considering” new legislation that would allow small business owners to take a second PPP loan.
Thanks to Biz2Credit and Forbes.com.
Also read: SBA’s $349B Paycheck Protection Program Now Out of Money, People Ditching Big Cities for Smaller Suburbs & More Space, 7.5M Small Businesses at Risk of Closing
