A new poll released Friday by the U.S. Chamber of Commerce and MetLife reveals 25% of small businesses say they’re two months or less from closing permanently amid the economic downturn caused by the coronavirus pandemic.
The poll also showed 11% of businesses are less than a month away from permanently going out of business. Additionally, almost a quarter of small businesses have already shut down temporarily due to the coronavirus outbreak. For businesses that have not closed, 40% say they are likely to close at least temporarily within the next two weeks.
The statistics mean a total of 54% of all small businesses report that they have closed or expect to close temporarily in the next two weeks. When asked what proposals might offer the most relief, three key provisions in the coronavirus relief package passed last week got the highest responses.
Fifty-six percent of small business owners said direct cash payments to Americans would be the most helpful form of aid from the government, followed by loans and financial aid (30%), and suspending payroll taxes (21%).
Neil Bradley, chief policy officer at the U.S Chamber of Commerce said banks are ready and willing to help, but they’re awaiting clear guidelines from the Trump administration.
“As the poll results show, small business owners are looking for loans and financial aid to ensure they do not have to shut their doors or go
bankrupt because of the coronavirus. American banks are ready to help, but they need clear guidelines from the Administration,” Bradley said. “American banks will be on the front lines to help businesses survive during this pandemic.”The coronavirus relief package known as the Families First Coronavirus Response Act, includes more than $349 billion in forgivable loans for businesses impacted by the coronavirus pandemic can use to cover costs including payroll and rent. Businesses and nonprofits can apply for those loans through the Paycheck Protection Program. Trump officials say that over $1 billion in loans have already been applied for.
Because of the help outlined in the bill and through savings of their own, some entrepreneurs have remained optimistic. Almost 1 in 4 (23%) small business owners expect to hire in the next year.
Bradley added that business owners shouldn’t be worried about the funds running out.
“No one wants a small business to close because they were the next in line when the fund ran out,” Bradley said in a press call on the poll. “The $350 billion is a data-driven number, so we want to make sure everyone gets the money they need to keep their business running.
“What we’re trying to do is to provide as much support and save as many businesses as we can,” Bradley added.
Christel C. Slaughter, CEO of SSA Consultants and U.S. Chamber Small Business Council chair said although things look grim right now, the government is making sure not to leave the backbone of the American dream behind.
“This is an extraordinarily difficult time for small business owners across the country. Many are facing significant disruptions and as the data show many are on the brink of closure,” said Slaughter. “While it is difficult to predict the future, the CARES Act provides much-needed aid and small business owners who can retain their core customers and top employees will be able to rebound more quickly.”
The coronavirus outbreak has affected the U.S. job market for both blue- and white-collar workers. Additionally, the Federal Reserve expects 47 million people to lose their job.