As we’ve all seen in our own neighborhoods and communities, and according to a recent poll by Metlife and the U.S. Chamber of Commerce on the impact of coronavirus, small businesses have borne the brunt of the pandemic’s economic devastation.
3-in-10 (29 percent) of small businesses say they have temporarily closed in the last two weeks, on top of 24 percent that said so last month; and, for the first time in the survey’s history, less than half of small business owners (48 percent) said they are comfortable with their current cash flow. Before the pandemic it hovered around 80 percent.
Follow the money
In March, the U.S. Chamber worked with Congress and the White House to get cash to Main Street. Congress approved additional funding for the disaster loan program at the U.S. Small Business Administration (SBA) and created the Paycheck Protection Program (PPP) that is providing $659 billion to the small business community. At the time of our survey, one-third (32 percent) of small businesses had applied, or tried to apply, for a PPP loan.
In April the Federal Reserve created the Main Street Lending Program, and recently updated its terms to lower the minimum loan size to $500,000 from $1 million, ensuring more small businesses can access loans they need.
The carnage on Main Street is real, but small businesses owners, being the entrepreneurs they are, are adapting.
Survival of the business
Small businesses are pivoting their business models not only to keep their businesses alive, but to continue supporting their customers, employees, and communities. In fact, two-thirds of small businesses say they have contributed to those in need during the pandemic, and 19 percent have produced or donated personal protective equipment, according to the poll.
For example, manufacturing business Wyoming Machine is producing precision metal parts that are key components of ventilators. The owners of Lay-N-Go started donating their catch-all bags to volunteers in Brooklyn emergency rooms to safely store medical supplies and personal items. Creature Comforts Brewing Co. in Athens, Georgia started producing hand sanitizer to sell and donate. And, there are countless examples of small businesses helping each other obtain SBA disaster and PPP loans.
Policies are certainly helpful and necessary, but it’s the entrepreneurial spirit that is helping to sustain small businesses across America. The current crisis reminds us that small business owners represent the very best of our nation’s principles of innovation, ingenuity, and hard work.