According to a report by the US Chamber of Commerce, they released results from a special survey on the Impact of COVID-19 in the US small business community which shows one in four small businesses report having already temporarily shut down.
They survey also said among those who haven’t shut down yet, 40% report it is likely they will shut temporarily within the next two weeks. Forty-three percent believe they have less than six months until a permanent shutdown is unavoidable. Nearly half of small businesses (46%) believe it will take the U.S. economy six months to a year to return to normal.
Small businesses are looking for relief in the form of direct cash payments (56%), Small Business Administration (SBA) disaster loans (30%), and temporary cancellation of business payroll taxes (21%).
Key findings this month include:
- One in four (24%) small businesses have shut down temporarily in response to COVID-19.
- Among those who 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%).
Index Highlights
- One quarter of small businesses already shut down. One in four (24%) small businesses have shut down temporarily in response to COVID-19.
- More temporary shutdowns 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. This means a total of 54% of all small businesses report they are closed or could close within the coming weeks.
- Clock ticking on permanent shutdowns. Forty-three percent believe they have less than six months (including one in ten that say they have less than one month) until a permanent shutdown is unavoidable.
- Seeking help. Small businesses are most favorable toward direct cash payments (56%), SBA disaster loans (30%), and temporary cancellation of business payroll taxes (21%).
- Seeking guidance. 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%).
- Most concerned about virus. More than 8 in 10 small businesses are concerned about the impact of COVID-19 on their business. Fifty-eight percent are very concerned.
- Sentiment on economy plunges. One in four believe the national economy is in good shape and 32% believe their local economy is doing well. Compared to last quarter2, these figures represent 35- and 20-percentage point drops, respectively.
- Majority see poor national economy. Fifty-four percent of small businesses rate the overall health of the U.S. economy as “poor.”
- Growing concern about cash flow. 59% feel comfortable with their current cash flow, compared to 80% in Q1.
- Retailers give themselves six months. Fifty-one percent of retailers believe their business can continue operating for no more than six months without shutting down permanently.
- Months before return to normalcy. Almost half (46%) of small businesses believe it will take the U.S. economy six months to a year to return to normal.
40% of Small Business Not Already Shut Down Predict Closure in Two Weeks
40% of the businesses not already shut down predict closure within two weeks. Eighty-four percent of small businesses are concerned about the impact of the coronavirus outbreak on their business, and a majority (58%) are very concerned–especially those in the Northeast, service industry, and those with 20 or more employees.
In response, many small businesses have implemented business-impacting response measures in the last two weeks. Given a list, the most common responses include shortening their business’s hours of operation (30%), temporarily closing their businesses entirely (24%), and adjusting employee salaries or hours (17%).
Service businesses are the most likely sector to report shortening hours (34%) or temporarily shutting down (32%), while manufacturers stand out as most likely to have adjusted employee salaries or hours (28%, compared to 10%-16% among service, retail, and professional service businesses).
For small businesses that did not shut down in the past two weeks, 40% say it is likely that they will do so in the next two weeks. This reflects the overall pessimism about a quick economic recovery in the small business environment: almost half (46%) believe it will take six months to a year for the small business climate to return to normal.
While 28% report that their business can continue operating without shutting down indefinitely, 43% believe they have less than six months, including one in ten (11%) that say they have less than one month, until a permanent shutdown is unavoidable. This sentiment varies by business size and length of operation.
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