BusinessStacy M. Brown

Small Businesses Struggling Amid Pandemic: Survey

The overwhelming majority of America’s 30 million small-business owners — approximately 87 percent — said their businesses are hurting from the coronavirus pandemic, according to a new survey released by personal finance website WalletHub.

The survey, which follows WalletHub’s report on State Economies Most Exposed to Coronavirus, shows some of how the outbreak has affected business owners’ livelihoods and opinions on topics such as reopening the economy.

Highlights of the survey include the finding that 35 percent of small-business owners say their business can only survive for less than three months in current conditions.

More than 200 small-business owners were surveyed online, and WalletHub researchers normalized the data by age, gender and income to get a sample that they said would reflect U.S. demographics.

Despite the passage of the $2.3 trillion stimulus bill that sets aside $350 billion for small-business loans, 79 percent of the owners noted that minimizing coronavirus-related deaths is more critical than reopening the economy.

Sixty percent of small-business owners also said that they believe restrictions placed in response to the pandemic should stay the same or be relaxed. In comparison, 68 percent said they don’t think the government is doing enough to help small businesses.

The new stimulus bill includes a Paycheck Protection Program that will be available retroactive from Feb. 15, to enable employers to rehire recently laid-off employees through the end of June.

According to the legislation, all businesses are eligible, including nonprofits and independent contractors with 500 or fewer employees. Businesses are eligible to receive up to $10 million, or a figure that will be determined by eight weeks of prior average payroll plus an additional 25 percent of that amount.

If a business maintains its workforce, the government will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll and certain other expenses, following loan origination.

Further, all loans will have a 0.5 percent interest rate and mature in two years.

Businesses won’t have to make any payments on the loans for six months and are not required to pay lender fees. Collateral or personal guarantees are required.

Despite the provisions, WalletHub found that small-business owners remain uneasy.

“We surveyed the small-business community, and more than 87 percent of small-business owners say their businesses are hurting due to the coronavirus pandemic,” WalletHub CEO Odysseas Papadimitriou said in a news release.

“There are a few clear reasons for this,” Papadimitriou noted. “For one thing, hardly any business is unaffected. It’s not like just a sector, or two of the economy has taken a downturn. Most businesses are going to zero revenue, and most businesses can’t survive long without any cash flow. 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.”

Everyone should make a plan for what to do in the event they lose their income, Papadimitriou added.

“This whole event should really hammer home the importance of having an emergency fund,” he said.

WalletHub, which has about 50 employees, has weathered the storm thus far, Papadimitriou noted.

“WalletHub was born as the country was emerging from the Great Recession, and those tough times really left a lasting impression on me,” he said. “As a result, I’ve managed the company’s financials rather conservatively since then, at least without the leverage common among our competitors. So, we’re actually in a pretty good position. We are continuing to hire, as a matter of fact.”

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Stacy M. Brown

I’ve worked for the Daily News of Los Angeles, the L.A. Times, Gannet and the Times-Tribune and have contributed to the Pocono Record, the New York Post and the New York Times. Television news opportunities have included: NBC, MSNBC, Scarborough Country, the Abrams Report, Today, Good Morning America, NBC Nightly News, Imus in the Morning and Anderson Cooper 360. Radio programs like the Wendy Williams Experience, Tom Joyner Morning Show and the Howard Stern Show have also provided me the chance to share my views.

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