Roughly 87 percent of business owners say their businesses are hurting from the economic shutdown due to the coronavirus, according to a survey conducted by the personal finance website, WalletHub.
The Coronavirus Small Business Survey follows WalletHub’s report on State Economies Most Exposed to Coronavirus, highlighting the ways in which local and federal government shutdowns of businesses have impacted the economy.
According to the survey, about 35 percent of small business owners say their business can only survive for less than three months in current conditions. Roughly 60 percent said restrictions imposed by local, state and federal governments in response to COVID-19 should stay the same or be relaxed, and 68 percent said the government is not doing enough to help them.
“Most businesses are going to zero revenue, and most businesses can’t survive long without any cash flow,” WalletHub CEO Odysseas Papadimitriou said. “Like most consumers, most businesses have too little saved and too much debt to hunker down and ride out this type of shock to the system without outside intervention.”
“One-third of small business owners say they have laid off employees due to COVID-19, and a slightly higher share – 36 percent – plan to do so,” according to WalletHub.
To help small businesses, the recent legislation passed by Congress, the CARES Act, allocated $349 billion toward a small business lending program. It also funds unemployment insurance payments and benefits for unemployed individuals impacted by the coronavirus who normally would not qualify for such assistance– including self-employed workers, independent contractors, and “gig economy” workers.
“This CARES Act is a far-reaching measure that will put money into the hands of small business owners who are really suffering right now,” Rohit Arora, cofounder of Biz2Credit and senior contributor at Forbes, says. “The challenge is to get the funding to them before it is too late, since many of them are currently struggling to meet payroll and their other bills. The long-lasting effect on the budget deficit right now has become secondary to keeping afloat America’s small businesses, which create the lion’s share of private sector jobs in the economy.”
The CARES Act’s small business-focused Paycheck Protection Program (PPP) increases the government guarantee of loans to 100 percent through Dec. 31, 2020, for SBA 7(a) loans. The loans are available to companies with less than 500 employees. Under the legislation, 501(c)(3) nonprofits, sole-proprietors, independent contractors, and other self-employed individuals are also eligible for the loans. The plan allows complete deferment of 7(a) loan payments for at least six months up to one year.
This article was first published by The Center Square.