As COVID-19 continues to impact daily life, small businesses are trying to adapt in any way they can to weather the economic fallout. Already, 27% of small businesses have reported cutting their hours in response to the pandemic, and 19% have had to adjust employee salaries and hours.
These are just two strategies small businesses owners have turned to in the face of deep economic uncertainty. A poll conducted by MetLife and the U.S. Chamber of Commerce found that small businesses are seeking loans, cutting hours, and managing concerns about how to keep their employees and customers safe.
“We know how hard the pandemic has hit small businesses,” said Jessica Moser, senior vice president, Small and Specialty Business at MetLife. “Sharing poll findings directly from small business owners provides an authentic platform to voice their concerns.”
The pandemic has definitely had an impact on SMBs. One in five reported that they were two months or less away from closing permanently due to the pandemic, and one in three has had to temporarily close in the last two weeks.
How small businesses are seeking funding to adapt through crisis
Small businesses are turning to banks, the government and peer-to-peer crowdfunding services to seek the necessary cash to stay in business. Twenty-six percent of small businesses have asked customers for money or have set up crowdfunding websites, while 19% have applied for a working capital loan.
The Small Business Administration has provided the most extensive financial tools to small businesses during the pandemic. These tools, like the PPP fund and disaster relief loans, have provided some financial relief, but have not served as the comprehensive solution that was hoped for.
Of the businesses surveyed, only 9% had received a PPP loan.
“With the latest round of PPP funds nearly exhausted, it is essential that we identify ways to step up for Main Street and find a solution for additional funding measures,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce.
Other financial statistics from the poll include:
- 47% of small businesses say PPP funding is critical to their operation.
- 32% of businesses surveyed have tried to apply for a PPP loan.
- 63% of small business owners rate the overall health of the U.S. economy as “very poor” or “somewhat poor.”
Small businesses need to find a path to getting back to work, but there are justifiable concerns over what reopening or operating a small business looks like while fighting a pandemic.
Neil Bradley, executive vice president and chief policy officer, U.S Chamber of Commerce
Employees of small businesses are deeply impacted
Businesses are adapting to economic uncertainty by closing, cutting hours and adjusting salaries, which means employees also have to pay the price for the economic shutdown.
One in five small businesses are paying employees despite shortening hours or closing, while almost 20% of businesses have had to adjust employee salaries and hours. Thirty-six percent of small business owners are concerned with protecting the health of their employees amid the pandemic.
“Small businesses need to find a path to getting back to work,” said Neil Bradley, executive vice president and chief policy officer at the U.S Chamber of Commerce, “but there are justifiable concerns over what reopening or operating a small business looks like while fighting a pandemic.”
SMBs, despite a bleak outlook, plan for growth
Small business owners do not see economic normalcy returning anytime soon. Eighty percent of small business owners think it will be three months to a year before a normal activity resumes. Despite this outlook, business owners are planning for growth, should they stay afloat.
- 64% of small business owners said they’d increase or maintain investment plans for the coming year.
- 79% anticipate increasing or retaining the same staff in the next year.
- 79% say they’re likely to bring back furloughed or laid-off employees.
- 86% of businesses with over 20 employees plan to rehire workers.
While uncertainty looms, small businesses throughout America are doing their best to adapt and survive the economic shutdown. Despite optimistic plans for the coming year, 85% of small businesses are still concerned about how the pandemic will impact their business.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
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