WASHINGTON, May 5, 2020 /PRNewswire/ -- Small businesses are transitioning to more virtual ways of working and seeking more flexibility and financial resources to survive the coronavirus pandemic, according to a monthly poll taken April 21 – 27, 2020 and released today by the U.S. Chamber of Commerce and MetLife. The number of small business owners reporting an increase in teleworking and asking for rent flexibility has nearly doubled from last month (20% up from 12% and 17% up from 9%, respectively). Additionally, 17% of small business owners say they have transitioned their retail presence to be more virtual or digital, up from 10% last month.
Small businesses have been adapting their businesses and operations in a number of additional ways:
- 27% of small businesses have shortened their hours;
- 26% have asked customers for support or started a crowdfunding campaign;
- 19% have adjusted employee salaries or hours; and
- 19% have applied for a working capital loan, an almost five-fold increase since last month.
Meanwhile, the number of small businesses shutting down continues to climb. One in three (29%) of respondents said they had shuttered their businesses temporarily in the last two weeks (note, these figures do not include small businesses that closed prior to the two-week period before the April survey was taken). That's up from 24% who reported the same one month prior. In addition, more than one in five small businesses (22%) say they are two months or less from closing permanently.
As the business community prepares for reopening across the country, the biggest concerns for small businesses are a lack of profitability due to the decreased number of customers (54%) and protecting the health of their employees (36%). Other concerns include a resurgence of the outbreak forcing another shutdown (34%), and challenges with implementing social distancing (28%) or additional health requirements (16%).
"In order to survive, small businesses need to find a path to getting back to work, reopening, and serving their customers, but there are justifiable concerns over what reopening or operating a small business looks like while fighting a pandemic," said Neil Bradley, executive vice president and chief policy officer at the U.S Chamber of Commerce. "Reopening is going to happen at a different pace throughout the country based on local conditions, and consistent guidance is necessary as businesses look to reopen and operate in a way that is safe and sustainable."
It is important to note that there are optimistic findings as well: most (64%) of small businesses say for the coming year they will increase or maintain investment plans. Of all small business owners surveyed, 79% anticipate increasing or retaining the same size staff in the next year.
Additionally, the poll also shows that among the small businesses that have furloughed or laid off employees, 79% say it is at least somewhat likely they will bring back most of their employees once the U.S. small business climate returns to normal. Larger small businesses are even more likely than smaller businesses to anticipate rehiring employees (86% of businesses with over 20 employees plan to do so).
Paycheck Protection Program (PPP) Funding
Many small businesses are also turning to the Small Business Administration's Paycheck Protection Program (PPP) to make ends meet. Nearly half (47%) of small businesses report that Small Business Administration's (SBA) Paycheck Protection Program (PPP) funding is critical in keeping their business open.
The report also finds that:
- One-third (32%) of small businesses have applied, or tried to apply for, a PPP loan and another 13% are still planning on applying.
- Seven in ten small businesses with 20 or more employees say the PPP loan is critical to keeping their business open, almost double the number of businesses with fewer than five employees that feel the same (39%).
- Larger small businesses (with over 20 employees) are the most likely to have applied for and received a PPP loan (29%) compared to small (3%) and mid-sized (14%) businesses.
- Of those that that have applied, or plan to apply for PPP funding, the primary intended uses are to pay current employee salaries (38%) or benefits and to pay rent/utilities (21%).
- Less than one-tenth (9%) received a PPP loan and 23% have either applied and not received funding or have unsuccessfully tried to apply.
"Small business owners are the foundation of our communities and they employ nearly half the American workforce. So many are struggling right now to keep their workers employed," said Tom Sullivan, vice president of small business policy, U.S. Chamber of Commerce. "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."
Small Business Concerns
A large majority (85%) of small business owners say they are still concerned about the impact of the coronavirus outbreak on their business. Over half (53%) are very concerned, especially those in the Northeast, Midwest, and in the service and retail sectors. Nearly two-thirds (63%) of small businesses rate the overall health of the U.S. economy as "very poor" or "somewhat poor" – an increase of 51 percentage points from our Q1 poll.
Most (80%) of small business owners think it will be at least three months to a year before the U.S. small business climate returns to normal, including 50% who think it will be at least six months. Half (50%) of small businesses feel their business is in good health, down seven points from last month.
Despite the challenging circumstances, small businesses are finding ways to give back to their communities. Two-thirds of small businesses have contributed to those in need during the pandemic. The most popular way to help with has been by donating to food banks or response funds, with 31% of small businesses saying they had done so. More than one in five (22%) said they are paying employees even though they are closed or have shortened hours and 19% have produced or donated personal protective equipment.
"We know how hard the pandemic has hit small businesses," said Jessica Moser, senior vice president, Small and Specialty Business at MetLife. "We believe that sharing poll findings directly from small business owners provides an authentic platform to voice their concerns as well as what solutions they need most to help them survive, and ultimately thrive."
The Small Business Coronavirus Impact Poll is a special monthly coronavirus report, separate from the quarterly MetLife & U.S. Chamber of Commerce Small Business Index. Research for the report was conducted by Ipsos from April 21 – 27, 2020. To read the full report, visit uschamber.com/sbpoll.
For small business resources on the coronavirus, please visit uschamber.com/co. Step-by-step guidelines on applying for a loan through the Paycheck Protection Program are available at uschamber.com/sbloans.
U.S. Chamber of Commerce
SOURCE U.S. Chamber of Commerce