Survey shows big concerns among small firms

A new survey from the National Federation of Independent Business has found nearly all small businesses in America are being impacted by the COVID-19 pandemic and half of them say they'll shut down in less than two months unless they receive financial assistance.

The survey was conducted March 30 among a random sample of NFIB's 300,000 small-business owners. Nearly 1,200 responses were collected from among business owners with between 1 and 465 employees.

According to survey results, released Friday, 92% of small-business employers say they have been negatively impacted by the coronavirus, up from 76% who reported negative impact 10 days earlier.

About 3% said they have been positively impacted. Those businesses, according to NFIB, are likely experiencing stronger sales due to a sharp rise in the demand for certain products, goods and services. Only 5% said they have not been affected -- either positively or negatively -- by the outbreak. Of those businesses, 44% said that will change if the outbreak spreads to, or spreads more broadly in, their immediate area over the next three months.

Among negatively impacted small employers, 80% reported slower sales, 31% said they are experiencing supply chain disruptions and 23% reported concerns over sick employees.

Many survey participants said they had concerns about the future of their businesses. About half the respondents said they can survive for no more than two months without financial support through the new small-business loan program enacted last week by the Small Business Administration. Meanwhile, about a third believe they can remain operational for three to six months while only about 13% of small-business owners say they aren't severely impacted and expect to remain open indefinitely.

Almost all small-business owners say they are taking steps to respond to the outbreak by adjusting to changing economic conditions or by protecting themselves from potential disruption. Just 5% of the respondents in last week's survey said they have not taken any action in response to the outbreak, a marked departure from more than half (52%) who had not taken action as of early March.

Actions taken by most small employers have steps recommended by the Centers for Disease Control and Prevention (CDC) to prevent the spread of COVID-19 in the workplace, including talking to employees about hand-washing, social distancing and disinfecting and cleaning offices and workplaces more frequently.

Another 56% said they have scaled down or adjusted their business operations and 26% have delayed payments to creditors due to the coronavirus-induced business slowdown.

Because of escalating financial stresses on small businesses, more of them said last week they are talking with their banks about financing needs than was the case 10 days earlier. About 29% of small-business owners said in last week's survey they had talked with someone at their bank or with the Small Business Administration about finance options and 23% said they are planning to do so soon. Another 38% said they have not, and do not, intend to do so.

The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act includes small-business loans through a Paycheck Protection Program (PPP). Nearly two-thirds of small-business employers say they plan to apply for a PPP loan or other financial assistance.

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