Small Business Majority Releases New Survey Data and Calls on Congress to Better Serve Small Businesses in COVID-19 Relief Package
A new network survey reveals 1 in 4 small businesses will not survive past 3 months without additional stimulus funding
Washington, DC — Today, Small Business Majority released a new network survey revealing how dire the situation is for the nation’s smallest business owners and called on Congress to immediately reevaluate the stimulus provisions being considered in the next COVID-19 relief bill. Among Small Business Majority's recommended changes are lowering the eligibility requirement for a second Paycheck Protection (PPP) loan to a 25% reduction in gross receipts and extending forgiveness to loans below $150,000 under the Economic Injury Disaster Loan (EIDL) program, so that businesses shut out of PPP, the majority of which are minority-owned, have a fair shot at recovery.
If changes are not made to current stimulus proposals, much-needed funding will remain out of reach for many small businesses. Small Business Majority’s new data finds that without more funding, 1 in 4 (26%) small businesses will not survive past the next three months.
Key findings from the survey include:
- Without additional stimulus funding, 44% of small businesses risk permanent closure in the next six months, 6% of which will be unable to survive one more month without additional funding.
- 35% of small business owners reported tapping their personal or retirement savings to stay afloat. The situation is so dire for some, that 16% of small business owners surveyed have considered filing for bankruptcy.
- An overwhelming majority (80%) of small businesses would consider taking a second PPP loan. However, to make the program more workable, lowering the eligibility requirement to a 25% reduction in gross receipts would allow 77% of small businesses to qualify for a second loan.
“For nearly five months small businesses have held on by whatever means necessary. For many small business owners, this has meant depleting their personal and retirement savings, not paying themselves in order to pay their employees, pivoting their business models on a dime, and all the while adapting to constantly changing guidelines to federal relief programs. But the end is drawing near for many. A wave of small business closures is looming on the horizon if Congress does not take this opportunity to provide targeted relief to the smallest, most vulnerable businesses,” said John Arensmeyer, Founder and CEO of Small Business Majority.
Additionally, Small Business Majority shared the stories of several small business owners calling on Congress to take their needs into consideration when crafting the next COVID-19 relief bill.
“Business is so up and down right now that it is next to impossible to predict what the future will hold. The one thing that I am certain of is that I will need additional relief financial assistance soon in order to stay afloat. Allowing for a second PPP loan is a wise move, but I’m worried that requiring a business to demonstrate a 50% loss in revenue to take this loan is going to leave many struggling businesses, like myself, behind with nowhere else to turn for help,” said Valerie Jones, owner of Jones & Jones Used Cars Inc. in Shreveport, Louisiana. “Each business has a different threshold for how much revenue they can lose before being in jeopardy of closing. For some that threshold could be 50%, but for others, it could be much lower. If Congress is serious about making sure that all small businesses will be able to recover from this downturn, they should loosen this requirement to give more businesses a chance to qualify and ultimately survive.”
“A large amount of the contracts that we work on are tied to the fiscal year, and therefore my 2019 revenue on paper looks smaller than it really is. When I received PPP, it was not enough to cover payroll for a two-month period. With business down and no end in sight, I need a second loan. But I don’t believe I would qualify under the proposed requirements, leaving my business in serious jeopardy. I call on Congress to rethink the burden it is placing on businesses that will be unable to qualify for a second round of PPP, and I hope they will lower the qualification requirements. As it currently stands, Congress is inadvertently picking and choosing which businesses have a better chance of making it out of this crisis intact,” said Erica Robertson, owner of Adeptus Solutions, Inc. in Leesburg, Virginia.
“When Congress designed PPP, they assumed that a one size fits all program would work for the range of different business models that make up the small business community. They could not have been more wrong. PPP was never going to work for my business. The program assumed my highest expense was payroll and that my 1099 employees were expendable. Because of this flawed logic, I could not borrow enough money through the program to make a PPP loan worthwhile. Now I am at a disadvantage because I took a traditional EIDL loan and have no option for forgiveness. I fully support extending automatic forgiveness for businesses that took modest EIDL loans because taking PPP was not in their best interest or they would have not qualified,” said Glen Miller, owner of Swing Dance America in Barrington, Illinois.
About Small Business Majority
Small Business Majority was founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 65,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.