The National Federation of Independent Business (NFIB) Research Center has released its latest national survey on the impact to small business of the COVID-19 pandemic and related lockdowns. The NFIB has done 14 of these surveys since early March.
The most concerning bit of data from the latest survey is that one-in-four small business owners report they will have to close in the next six month if the economy does not improve. This is an increase of 5% since last month, and an additional 22% of owners anticipate they will not be able to make it 12 more months.
“Many small businesses are facing additional challenges right now related to weather conditions and renewed business restrictions across the country,” said Holly Wade, Executive Director of NFIB’s Research Center. “The next few months might prove to be the most difficult time for small businesses since the initial shutdown last spring. It is crucial that Congress provides financial relief for small businesses as we head into the winter months.”
As defined by the national Small Business Administration (SBA), small business is one with under 500 employees. Nearly 31 million companies in the U.S. are classified as small business and 8 million of those are minority-owned. In 2018, the last full year of data available from the SBA, nearly 59 million people were employed by small businesses – with 40 million of those in businesses under 100 employees and 20 million in businesses under 20 employees.
Georgia NFIB Director Nathan Humphrey said, “Unless Congress provides additional assistance for small businesses soon, more small businesses may close for good.”
Other findings from the recent survey include that 91% of Paycheck Protection Program borrowers have spent their entire PPP loan and 45% of small businesses would apply for a second PPP loan if that is an option. An additional 33% would consider applying.
Businesses also continue to submit the paperwork for their PPP loan forgiveness, up 44% now compared to just 26% last month. Some 20% are ready to submit their forgiveness applications but their banks are not yet accepting them.
Despite receiving a PPP loan, 22% of small businesses report expecting having to lay off employees in the next six months and more than half of them anticipate needing additional financial support in the next year.
Besides the PPP loans, more than one-third of small business owners have applied for an Economic Injury Disaster Loan (EIDL) – of those, 82% have already had their loan approved and 8% were denied. State and local grants have also been an option for some small businesses, with 20% reporting applying for one of those and more than 50% receiving a grant.
Perhaps the most important number of all, sales levels, are still being reported as 50% or less than they were pre-crisis for 20% of businesses and 30% of businesses report sales of between 51%-75% in pre-crisis levels.
To see the full results of the survey, go here
