Almost 7.5 million small businesses in the United States are at risk of closing over the next five months. The closures are a result on the coronavirus crisis. This was the finding of a new report published by Main Street America, a program of the National Trust for Historic Preservation.
Impact of COVID-19 on Small Businesses
Main Street’s ‘Impact of COVID-19 on Small Businesses’ report reveals that 3.5 million businesses are at danger of permanent closure. Approximately 35.7 million employees of small businesses in the US could face unemployment, the report also found.
The report surveyed around 6,000 small business owners. 91% of the participants employ 20 or fewer staff. It was released at a time when the US government rushes to address the unprecedented challenges US business are facing. Such challenges include difficulties small businesses are encountering when applying for financial assistance.
The report calls on Congress to fund the US Small Business Administration and partner organizations. Such organizations include local Main Street programs and Chambers of Commerce. The partnerships would be aimed at expanding technical assistance to small businesses.
Financial Support Must Be Available
To help navigate through these difficult times, it’s important small businesses remain up-to-date about the support available to them. Being aware of the situation other businesses are in, could also help small businesses get through these uncertain times. Reports like Main Streets’ act as an important educator to help small businesses remain informed about the support available.
Patrice Frey, President and CEO of Main Street America, commented about concerns over the funding for small businesses.
“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.
“Congress must ensure there are sufficient funds to support all small businesses in need, particularly those with under 20 employees,” Frey continued.
The report also explores small business’s current sales strategies. It found that two-thirds of businesses surveyed admit to not having an active online sales component to their business. Main Street suggests that the federal government needs to invest in web development and e-commerce training for small businesses. As well as financial assistance, the report finds that business owners need penalty-free extensions on expenses.
Small businesses of every sector would be wise to stay connected to resources like the Main Street report, which act as educators through the current crisis. Failing to know about the financial assistance available could mean small businesses are more likely to fail as a result of the pandemic.
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Businesses with a place of business should consider making a claim for the costs of business interruption or lost revenues under their business owners or premises liability insurance policies. Great examples of businesses that should consider making claims include restaurants, beauty salons, retail stores, physicians offices. If your claim is rejected by the insurance company, do not be deterred. My law firm and others are pursing these claims as we believe there is coverage.
I have been making a concerted effort to shop with local, small businesses lately. I usually get better service. Sometimes it costs a little more, but that money stays in the community.
That’s a huge amount and it can really endanger the economy and purchasing power.