Small businesses continue to face closures in 2021

Small Business Majority
miércoles, enero 27, 2021

Nearly a year into the COVID-19 pandemic that has devastated our country and economy, small business owners continue to experience significant setbacks and reduced customer demand. A national survey of small business owners further spotlights the distressing effects of the pandemic and what owners anticipate in the months to come. The polling also reveals the disproportionate impact of the economic crisis on small business owners of color, particularly Black, Latino and Asian American/Pacific Islander (AAPI) entrepreneurs. 

The poll, conducted by Lake Research Partners for Small Business Majority, surveyed 500 small business owners, with oversamples of 300 Black, 300 Latino and 150 Asian American/Pacific Islander (AAPI) entrepreneurs, across the United States between Nov. 10 to Nov. 23, 2020. The survey sheds an important light on how entrepreneurs of color navigated the first round of federal relief and what they need to survive the ongoing crisis.  

Despite efforts to cautiously reopen local economies and “get back to normal” during the summer and fall months in 2020, small business owners report they have had to resort to drastic measures to keep the lights on. Of those employers who reduced their number of employees during the pandemic’s height and economic downturn through furloughs and/or layoffs, 60% report they have not restored their headcount to pre-pandemic levels. Even before some businesses were faced with another set of closures or capacity restrictions, 18% of Black and Latino entrepreneurs report they are likely to permanently close their business in the next three months, compared to 14% of white small business owners. 

Moreover, small business owners report they’ve struggled to navigate new funding programs, such as the Paycheck Protection Program (PPP). And they are experiencing operational impediments to ensure the health and safety of customers and employees—obtaining personal protection equipment (PPE), rearranging workspaces and retail floors to accommodate distancing and transitioning to remote work. Of those who applied for a PPP loan last year, nearly 6 in 10 (57%) found it challenging to apply.

Entering into a new year, more entrepreneurs of color report they may temporarily close their business in the next three months: 32% of Latino, 29% of Black and 25% of AAPI business owners, compared to 21% of white business owners. Nearly 1 in 4 (22%) business owners of color may lay off employees permanently, compared to 14% of white business owners.  

The survey also reveals support for government policies that small business entrepreneurs say would help them stay in business until the economy recovers. Federal funding assistance through grants and loans—programs that are supported by most small business owners—can help those on the edge. Nearly 80% of small business owners support providing direct grant assistance to small businesses.