Small Business Majority Survey: State of small business six months into the COVID-19 pandemic
On August 8th, Congress let the Paycheck Protection Program (PPP) expire without additional relief in place. Three weeks on, negotiations for the next round of relief remain at a complete standstill. In the meantime, small business owners continue to struggle to make ends meet. As such, Small Business Majority surveyed its national network of 70,000 small business owners to assess the current state of small business and gauge their views on possible relief measures.
The looming question of when additional help will be on the way has left many small businesses at a crossroads. Without additional funding, more than a quarter (26%) of small business owners will not survive past the next three months, and nearly 1 in 5 say they won’t make it longer than four to six more months. Equally troubling, to date 16% of small businesses have considered bankruptcy in the wake of the pandemic. These results are comparable to findings from Small Business Majority’s last survey fielded in late July and early August, indicating small businesses are no better off today than they were nearly four weeks ago.
A wave of commercial evictions and foreclosures could also be on the horizon, with more than 6 in 10 (62%) small business owners reporting that they are struggling to make commercial rent or mortgage payments—up 6% since earlier this month.
The survey also reveals the extent to which PPP and the Economic Injury Disaster Loan (EIDL) programs have served small businesses during the pandemic. Three in four small businesses have received a PPP loan, EIDL or both, with 25% receiving a PPP loan, 12% receiving EIDL and 39% accessing a loan from both programs.
However, not all small business owners were fortunate enough to receive federal stimulus assistance in the wake of this crisis. Of those who did not receive both PPP and EIDL, 36% said they were denied a loan through one program or the other. Despite waving credit and collateral requirements for federal stimulus loans in the CARES Act, nearly 3 in 10 respondents (29%) were denied PPP or EIDL based on their credit score.
Given the rate at which small businesses are struggling to make ends meet, more assistance is needed for many businesses to survive. If Congress moves forward with allowing businesses to take a second loan through PPP, most of Small Business Majority’s network would be eligible. The losses among small businesses have been so severe that 70% of business owners are experiencing a revenue decline of at least 25% or more, with 5 in 10 businesses experiencing losses of 50% or more. Additionally, most small businesses (88%) support making EIDL loans under $150,000 fully forgivable.
Finally, as Congress and the Administration debate changes to the United States Postal Service (USPS), more than half (54%) of business owners in Small Business Majority’s network rely on USPS to ship and or receive goods or products for their business. Unfortunately, of those who depend on USPS, 60% have been impacted by shipment delays during an already down cycle.
The findings of this survey paint a picture of how dire the circumstances are becoming for many small business owners. Unlike early predictions of a sharp recovery once states began to reopen, six months into this crisis thousands of small business owners are looking to Congress to provide more comprehensive relief to sustain their businesses and set our economy on a meaningful path toward recovery.
This is the fourth in a series of COVID-19 related surveys Small Business Majority has released of its network. The first survey was released in late May, with additional surveys released every three to five weeks. Over time Small Business Majority has tracked the economic conditions facing small businesses, how well federal stimulus programs have served its network, the small business owners' views of proposed stimulus provisions, and other issues of importance.