National Opinion Poll: Small Business Owners of Color Continue to Face Closures Nearly a Year into the Pandemic

For Immediate Release: 
Wednesday, January 27, 2021

New Small Business Majority national survey reveals small business owners anticipate making new cuts in the next few months to sustain their businesses, with business owners of color experiencing greater impacts.

(Washington, DC) -  As Congress begins to negotiate a new stimulus package, today Small Business Majority released results from a national poll that reveals the uphill challenges entrepreneurs continue to face during the pandemic. Importantly, the survey underscores the ongoing disproportionate impact of the pandemic on small businesses owned by people of color who already faced systemic barriers to accessing financing and business resources. 

Despite state and federal efforts to provide emergency funding to small businesses, the survey reveals they continue to experience major losses in revenue. As a result, many have had to make difficult decisions to stay afloat: 32% have cut employee hours and 24% have temporarily closed their doors. Of those who reduced staff at the height of the downturn last year, a vast 60% have not restored their headcount to pre-pandemic levels. 

As the pandemic surges around the country, small business owners of color are more likely to have to take drastic steps to stay afloat. Nearly 1 in 4 entrepreneurs of color (Black, Latino and Asian American Pacific Islander business owners) may lay off employees permanently in the next few months, compared to 14% of white business owners. The survey also reveals that 18% of Black and Latino small business owners report they are likely to permanently close their business, compared to 14% of white small business owners. 

While some small businesses have been able to access federal relief, poll findings reveal how small business owners struggled to navigate funding programs last year. Of those who applied for the Paycheck Protection Program (PPP), 57% said the application process was difficult, while only 33% received the full amount of the loan they requested.Minority-owned businesses were less likely to receive the full amount requested (27% Latino, 23% Black and 23% AAPI). 

“Applying to federal relief programs has been incredibly complicated from the start, especially for small minority and women-owned businesses,” said Rochelle Smith, owner of Eliteress Beauty in Cypress, Texas. “Small businesses like mine should receive a fair shot at applying to those programs. If my business is denied for this second round of PPP, I’m not sure how I’ll keep my business alive while the pandemic continues to drag on.”

The weeks ahead will prove to be even more challenging as small business owners anticipate making further cuts, and more entrepreneurs of color may temporarily close their business in the next three months (32% of Latino, 29% of Black and 25% of AAPI, compared to 21% of their white counterparts). It should come as no surprise then that most small business owners (80%) support direct federal grant assistance, which has been proposed in President Biden’s economic relief plan.

“As these survey results make clear, small businesses urgently need Congress to work with the Biden Administration to pass a comprehensive federal relief plan that will put small businesses on a meaningful pathway to recovery,” said John Arensmeyer, Founder & CEO of Small Business Majority. “While temporary solutions to provide emergency funding have provided an important lifeline to small businesses, they need bold measures to see them through the challenging months ahead. Another wave of layoffs and business closures is on the horizon if Congress doesn’t act swiftly.” 

This poll represents the opinions of 500 small businesses with oversamples of 300 Black300 Latino and 150 Asian American Pacific Islander entrepreneurs and was conducted by Lake Research Partners for Small Business Majority. For a copy of the full report, please visit: https://smallbusinessmajority.org/our-research/small-businesses-continue-face-closures-2021

About Small Business Majority

Small Business Majority is a national small business organization that empowers America's diverse entrepreneurs to build a thriving and inclusive economy. We engage our network of more than 80,000 small businesses and 1,000 business and community organizations to advocate for public policy solutions and deliver resources to entrepreneurs that promote equitable small business growth. Our deep connections with the small business community along with our scientific research enable us to educate the public about key issues impacting America’s entrepreneurs, with a special focus on advancing the smallest businesses and those facing systemic inequalities. Learn more about us on our website and follow us on TwitterFacebook and Instagram.

Press State: 
National