A new report published by Main Street America, a program of the National Trust for Historic Preservation, reveals that approximately 3.5 million businesses are in danger of permanent closure over the next two months, and nearly 7.5 million are in danger of closing over the next five months as a result of the Covid-19 crisis. Further, approximately 35.7 million Americans employed by small businesses may face unemployment.
The Impact of COVID-19 on Small Businesses is based on the first and most extensive survey to date assessing the impact of the pandemic on small businesses, especially those that employ 20 or fewer people. Nearly 6000 small business owners responded to the survey, of whom 91% own businesses with staff of fewer than 20 people.
The report has been released as the federal government races to address the worst financial crisis this nation has seen since the Great Depression, trying to head off financial stagnation by infusing huge sums of cash into the economy. Yet recent media reports detail the difficulties faced by banks in disbursing federal stimulus funding to small business, as well as the challenges businesses are encountering when applying for assistance.
“We remain deeply concerned that many of our nation’s smallest businesses are the most vulnerable to revenue disruption caused by the pandemic, and these businesses are the least able to obtain funds absent a well-developed relationship with an existing lender and/or technical assistance in securing funds, says Patrice Frey, President and CEO of Main Street America. “Congress must ensure there are sufficient funds to support all small businesses in need, particularly those with under 20 employees.”
The report also calls on Congress to fund the U.S. Small Business Administration and partner organizations like local Main Street programs and Chambers of Commerce to expand technical assistance to small businesses. These local economic development organizations act as critical connectors and educators for our nation’s smallest employers and can help ensure stimulus dollars reach these businesses. Similarly, state and local governments must continue to prioritize and fund these essential downtown and city-wide small business support organizations. These programs not only play a vital role in stabilizing local economies throughout the crisis but will expedite the recovery process once the pandemic subsides.
While much focus has turned to supporting e-commerce solutions to help boost revenue while the nation remains in quarantine, troublingly almost two-thirds of the businesses surveyed said they did not have an active online sales component to their business. The report suggests web development and e-commerce training for small businesses might also be a needed area of investment for the federal government to consider as the need for further cash infusion is evaluated.
The report is based on survey responses from small business owners in 48 states and the District of Columbia. Respondents came from more than 1,000 locales across the United States, including big cities like New York and Chicago and small towns like Blairsville, Georgia and Greybull, Wyoming. Nearly 40 percent of the small businesses represented in this survey operate in towns with fewer than 10,000 residents. Survey data is available via interactive maps on mainstreet.org.
Main Street America has been helping revitalize older and historic commercial districts for 40 years. Today it is a network of more than 1,600 neighborhoods and communities, rural and urban, who share both a commitment to place and to building stronger communities through preservation-based economic development. Main Street America is a program of the nonprofit National Main Street Center, a subsidiary of the National Trust for Historic Preservation.