PPE requirements, business closures, and large overhead costs threaten America’s small businesses
June 11, 2020 – Today, America’s Recovery Fund Coalition (ARFC) and the Save Small Business Coalition (SSBC) released findings from a new small business survey on COVID-19’s impact. Without additional fiscal support, 1.2 million American small businesses could be closed for good by September of 2020. At this time, 62 percent of small businesses cannot rule out layoffs in the next 60 days — even as the economy begins to reopen.
“Last week we saw some changes to the Paycheck Protection Program (PPP), reducing the payroll requirement from 75 percent to 60 percent, but this is still not enough,” said Trevor Hanger, research director for ARFC. “The pandemic requires businesses to take on additional overhead costs when reopening to adhere to new safety guidelines, and 47 percent of small businesses we surveyed said PPP did not give them enough funds to cover those costs. Further, our survey found that businesses that are reopening are experiencing an 85 percent decrease in revenue. Bottom line: American enterprise is in grave danger. We need to do more.”
America’s Recovery Fund would allow businesses to reopen with certainty, providing grants to fill the gaps between expenses and revenue, through a simple, easy-to-use application. This fund would be available across many industries, working to help retail, restaurants, salons, gyms, bookstores, the travel industry, construction, financial services, auto body shops, and more.
“Without bold and immediate help, we are at risk of losing small businesses — the face of American enterprise,” said Nancy Hoffman Vanyek, Chief Executive Officer of the Greater San Fernando Valley Chamber of Commerce. “Our communities are suffering. 50 percent of businesses were closed longer than eight weeks, and over a quarter of businesses are still closed today. Reopening isn’t as simple as flipping a sign in the window — 70 percent of SSBC members are having to invest even more money into overhead to buy personal protective equipment (PPE) in accordance with CDC guidelines,” added Hoffman Vanyek. “These unprecedented changes mean we need big ideas to keep businesses operating, from rehiring and keeping staff, to changing inventory, to creating new spaces for social distancing, to figuring out how to stay in business in the long run, we need America’s Recovery Fund.”
- Of the 1,545 participating small businesses across 17 states surveyed, 47% said the Paycheck Protection Program did not provide enough funds to cover their overhead costs.
- Without additional fiscal support, 1.2 million American small businesses could be closed for good by September of 2020.
- At this time, 85 percent of businesses that have reopened say they are experiencing moderate to significant revenue decreases, with over half calling those decreases “significant.”
- According to 69 percent of small businesses trying to stay open during the pandemic, they need more capital in order to cover overhead costs.
- Even as the economy begins to reopen, 62 percent of businesses say they cannot rule out potential layoffs of employees in the next sixty days.
- Right now, 20 percent of small businesses surveyed said they would go out of business forever if they receive no additional help.
The survey examines the impact of COVID-19 on America’s small businesses and the government’s response. View the complete survey analysis here.