Survey: Small businesses share current business concerns, challenges with federal relief programs

Small Business Majority
Thursday, May 12, 2022

As entrepreneurs continue to navigate a number of challenges operating their businesses, Small Business Majority surveyed small business owners and managers nationwide to understand their current business conditions and how they may have benefited from federal relief programs.

The survey represents a diverse sample of entrepreneurs, with nearly two-thirds of the sample comprising entrepreneurs of color and more than 7 in 10 respondents women. One in 3 respondents are self- employed, and more than half are owners of businesses with 10 or fewer employees. Additionally, nearly 1 in 5 are newer businesses, having started their business in 2020 and 2021.

The survey reveals that nearly two-thirds (65%) of small businesses felt more optimistic about their business prospects for the second quarter. Despite this optimism, small businesses are facing a number of challenges in maintaining their business operations. Inflation is a top concern, as 80% have been negatively impacted, while 65% have been negatively impacted by supply chain disruptions, and more than half (52%) have been negatively impacted by workforce shortages. Nearly 1 in 4 (24%) report they may not survive past the next six months without additional funding or market changes.

Despite these ongoing setbacks, the survey reveals that government programs such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and the Employee Retention Tax Credit (ERTC) have helped small businesses stay afloat. Of those small businesses who applied and received at least one PPP loan, 94% report they have received full forgiveness of their loan. Roughly 6 in 10 (58%) small businesses applied for EIDL, and of those, two-thirds (67%) received a loan. Notably, though, approval rates were lower for the 212 entrepreneurs of color (59%) we surveyed compared to the 136 white business owners surveyed (73%).

At the height of the pandemic, the SBA limited the EIDL loan amount to a maximum of $150,000. Since then, the SBA has offered small business owners a chance to increase their loan amount. Of respondents who received EIDL, 57% requested an increase, and only 42% of those loan increases have been approved. Three in 10 are still waiting for a decision from the SBA about their loan increase.

Small business owners have shown immense resilience throughout the pandemic, but the need for continuous government programs is in great demand. PPP, EIDL and ERTC are some of the many federal programs that have assisted small businesses to operate and contribute to our economic recovery. As these results reveal, small businesses need additional assistance as they continue to navigate challenges to maintaining and growing their businesses.