Startup Small Businesses Struggle to Obtain Coronavirus (COVID-19) Financial Assistance; Remain Hopeful Despite Confusion Over CARES Act

WASHINGTON, May 12, 2020 /PRNewswire/ -- Startup small businesses are reporting varied attitudes about the CARES Act, and only 25% of startups have received non-government financial help in response to COVID-19, according to new data gathered by SCORE, mentors to America's small businesses. While 59% of startups expect business revenue to be lower in the next three months, most startups have not changed their business plans, and half still expect revenues to increase over the next year.

59% of startup small businesses expect revenue to significantly decrease in the next three months:

• 41% of startups expect revenue to be 75% lower.
• 12% of startups expect revenue to be 50% lower.
• 6% of startups expect revenue to be 25% lower.
• 16% of startups expect no change in revenue.
• 18% of startups expect revenue to be 25% higher.
• 5% of startups expect revenue to be 50% higher.
• 2% of startups expect revenue to be 75% higher.

In the next six months, roughly half (55%) of startups expect revenue to be lower, while one-third (37%) expect revenue to higher.

• 18% of startups expect revenue to be 75% lower.
• 26% of startups expect revenue to be 50% lower.
• 11% of startups expect revenue to be 25% lower.
• 8% of startups expect no change in revenue.
• 19% of startups expect revenue to be 25% higher.
• 13% of startups expect revenue to be 50% higher.
• 5% of startups expect revenue to be 75 higher.

One year from now, roughly half (44%) of startups expect revenue to be lower, while half (46%) expect revenue to be higher.

• 12% of startups expect revenue to be 75% lower.
• 13% of startups expect revenue to be 50% lower.
• 19% of startups expect revenue to be 25% lower.
• 10% of startups expect no change.
• 14% of startups expect revenue to be 25% higher.
• 16% of startups expect revenue to be 50% higher.
• 16% of startups expect revenue to be 75% higher.

Startups report confusion in response to effectiveness of CARES Act:

• 44% of startups said direct payment to individuals was helpful, while 28% did not know if it was helpful, and 13% said it was not helpful.
• 33% of startups said unemployment insurance benefits for the self-employed was helpful, while 27% did not know if it was helpful, and 17% said it was not helpful.
• 30% of startups said the Small Business Debt Relief program was helpful, while 24% did not know if it was helpful and 15% said it was not helpful.
• 30% of startups said the Emergency Economic Injury Grants and Disaster Loans (EIDL) was helpful, while 34% did not know if it was helpful and 11% said it was not helpful.
• 26% of startups said the Payment Protection Program (PPP) was helpful, while 20% did not know if it was helpful and 17% said it was not helpful.

Only 25% of startups have received non-government financial help:

• 10% of startups received delays for existing loan payments.
• 7% of startups received new loans.
• 7% of startups received crowdfunding or other community requests.
• 5% of startups received improved payment terms from vendors.
• 4% of startups received expanded lines of credit.

Startups plan to hire more employees over time:

• 17% of startups expect to hire in the next three months.
• 29% of startups expect to hire in the next six months.
• 45% of startups expect to hire in the next year.

"Small business owners are extremely hard-working and resilient, and that rings true now, more than ever," said SCORE CEO Bridget Weston. "Although data shows that many business owners expect revenues to drop in the coming months, there are a growing number of free resources that small business owners should take advantage of, including SCORE's Coronavirus Small Business Resource Hub, which offer critical support and resiliency training that small business owners need at this time."

Download the infographic for more information on the small business outlook in response to COVID-19.

About SCORE

Since 1964, SCORE has helped more than 11 million aspiring entrepreneurs. Each year, SCORE's 10,000 volunteer business experts provide free small business mentoring sessions, workshops and educational services to more than 260 chapters and 1,500 communities nationwide. In 2019, SCORE volunteers helped to create 29,681 new businesses and 67,706 non-owner jobs.

For more information about starting or operating a small business, or on volunteering with SCORE, visit SCORE at www.score.org. Follow @SCOREMentors on Facebook, Instagram and Twitter for the latest small business news and updates.

Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

Contact Information 
Betsy Dougert 
800-634-0245 
[email protected]

SOURCE SCORE

Related Links

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