two small business owners packaging an order
Recent polling by MetLife and the U.S. Chamber of Commerce displays the impact of COVID-19 on small businesses, with one in four on the verge of shutting down permanently. — Getty Images/jacoblund

The COVID-19 pandemic has had a major impact on all areas of life, and small business is no exception. One in four businesses have already shut down due to coronavirus, and 54% reported they were closed or could close in the coming weeks.

With no end to the uncertainty in sight, measuring the impact is becoming important now more than ever. The most recent Small Business Index performed by MetLife and the U.S. Chamber of Commerce sheds light on the virus’s impact on the U.S. small businesscommunity.

Major findings include:

  • One in four (24%) small businesses have shut down temporarily in response to COVID-19.
  • Among those that haven’t temporarily shut down yet, 40% report it is likely they will do so within the next two weeks. This means a total of 54% of all small businesses report they are closed or could close within the coming weeks.
  • Small businesses are most favorable toward financial assistance in the form of direct cash payments (56%), but also prefer SBA disaster loans (30%).

Small business environment

COVID-19 has had a major impact on the U.S. economic small business environment. As more social distancing orders continue to be issued, a further decrease in economic activity is likely. Some major findings include:

  • More temporary shutdowns are likely in coming weeks. Among those who haven’t temporarily shut down yet, 40% report it is likely they will do so within the next two weeks.
  • The clock is ticking on permanent shutdowns. Forty-three percent believe they have less than six months (including one in 10 that say they have less than one month) until a permanent shutdown is unavoidable.
  • Fifty-eight percent are very concerned about the virus, and more than eight in 10 small businesses are concerned about the impact of COVID-19 on their business.
  • Fifty-four percent of small businesses rate the overall health of the U.S. economy as “poor.”

Fifty-one percent of retailers believe their business can continue operating for no more than six months without shutting down permanently.

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Solutions for small business

With a bleak economic outlook, more financial assistance may be necessary for small businesses. Congress already passed stimulus packages that include aid to small businesses, and the Small Business Administration is opening up its disaster relief loan program to include all small businesses affected by COVID-19.

The following is data related to effective solutions for small business during the crisis:

  • Small businesses are most favorable toward direct cash payments (56%), SBA disaster loans (30%) and temporary cancellation of business payroll taxes (21%).
  • Small business owners would like more guidance on how to keep their customers and employees safe (29%), how to respond to the crisis (26%) and how to understand the outbreak (25%).
  • Fifty-nine percent feel comfortable with their current cash flow, compared to 80% in Q1.

Moving forward

As small businesses continue to weather the difficult economic situation, uncertainty is causing a negative outlook.

  • Forty-six percent of small businesses believe it will take the U.S. economy six months to a year to return to normal.
  • Fifty-one percent of retailers believe their business can continue operating for no more than six months without shutting down permanently.
  • Only 23% of small businesses expect to hire more workers in the next year, compared to 30% that were expecting to hire workers before the pandemic hit.

Methodology

Roughly 500 small business owners and operators over the age of 18 participated in an Ipsos poll conducted by MetLife and the U.S. Chamber of Commerce Small Business Index. The sample size included business owners from the continental U.S., Alaska and Hawaii.

For more resources from the U.S. Chamber of Commerce:

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Published April 08, 2020