Small businesses don’t plan for COVID-19 relief until at least May

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COVID-19 continues to impact children companies in terms of customer traffic, revenue and the ability to operate in the face of government-mandated closures, but there could be light at the end of the tunnel.

According to a to study Out of 10,325 business owners surveyed Jan. 9-12, two-thirds of small businesses continue to experience the negative impacts of COVID-19, and about 46% said the impact is significant. This is a slight improvement over last month, which can be attributed to the disappearance of the third round of the Coronavirus Aid, Relief and Economic Security Act (CARES) coupled with multiple COVID-19 vaccine approvals, according to Alignable, who led the investigation.

Meanwhile, 15% of those surveyed said COVID-19 had a positive impact on their business and 17% said the pandemic has no impact on their business, according to the survey.

Cash flow crisis

Some small businesses are facing a cash shortage as a result of the pandemic, with around a third reporting they have only one month or less of cash on hand, while 44% said they have three months or less. more cash reserves and 22% said they have it. 1 to 2 months of reserves. As such, a large percentage of small businesses said financial relief is important or essential to help them stay in business through the first half of this year.

The latest wave of relief is specifically targeting hard-hit industries, but distribution has stalled, said Alignable. Among the provisions available to businesses are an extension and improvement of the Paycheck Protection Program (PPP); Economic Disaster Loans (EIDL) which provide grants to eligible small businesses in low-income communities; new subsidies for closed industries such as theaters, independent cinemas and cultural institutions; and the extension of existing debt relief programs.

“While SMEs continue to experience a severe cash flow crisis, 80% of business owners plan to seek additional relief funding as part of the third round of the PPP, which could force the new administration to put more funds in. available soon after taking office, ”said Eric Groves, co-founder and CEO. alignable.

“Most businesses see PPP as a bridge to bring them to a time when recovery is possible and the majority of business owners agree that this can only happen with rapid distribution of the vaccine to all citizens. When asked what would have the most impact on their recovery in 2021, 58% chose vaccine distribution while 42% chose P3 relief. “

Shocked by the fourth quarter, looking forward to May 2021

A significant economic recovery will not begin until the country has brought the virus under control, which is not expected until at least May, according to the report. About 45% of those polled said they hoped to reopen their business with the same level of products and services offered before the start of the pandemic sometime after May.

Many small businesses are also feeling the effects of a dismal fourth quarter, which would typically be their most profitable time of the year. Forty-six percent of small businesses surveyed said less than half of their pre-COVID customers visited their business in December, and 72 percent of businesses experienced year-over-year revenue decline during the fourth trimester. Many companies don’t anticipate much improvement in early 2021.

“With the number of cases continuing to rise in North America, it’s clear that business owners are anticipating further government restrictions as well as a slow rollout of vaccines,” Groves said. “As you might expect, in December we also saw an increase in concerns about customers’ fear of returning. Surveys in recent months have shown that a growing number of consumers are afraid to shop on Main St. Unfortunately, they are choosing to buy their products online from large retailers, diverting that money from struggling local retailers – and of their own communities. “

Keep employees

The small businesses surveyed were able to keep around 80 percent of their employees on their rosters, which is a positive note as further declines in employment were expected at the end of 2020. Business owners now appear to believe that ‘There will be a continued slow climb to full employment, provided COVID cases are under control, Alignable said. Many small businesses fail to hire and keep existing staff busy when normal operations are slow, and others are applying staff to expansions in other areas of their business, Alignable said.

Kristen beckman is a Colorado-based freelance writer. Previously, she was a writer and editor for ALM’s Retirement Advisor magazine and online channel LifeHealthPro. She has also been a journalist for Business Insurance magazine covering topics related to workers’ compensation. Kristen has a journalism degree from the University of Missouri.

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