SMBs Seek Speedy Relief to Recover in 2021
Grants, loans, recovery programs. They all sound good on paper, but for small businesses trying to get back on the path to recovery, time is of the essence.
New local, state, and federal recovery programs are being announced daily in a bid to help small and mid-size businesses survive during the pandemic. The Biden administration is pledging $15 billion in grants to help businesses, and $35 billion for small business financing programs, as part of its new American Rescue Plan. But many grants and recovery programs have long timelines, and business owners are saying they need more immediate support.
While the overall number of small businesses experiencing a negative impact from Covid-19 declined slightly from December 2020 to January 2021, the percentage of business owners experiencing “significant impact” still sits at 46%. The percentage of businesses reporting a positive impact remained flat from December to January, at 15%.
Businesses are still waiting to see improvements in customer levels and revenues in 2021, but Alignable’s survey found that more SMBs are beginning to see an improved outlook thanks to the passing of the third round of stimulus legislation, coupled with multiple approvals of Covid vaccines.
Eight in 10 business owners say funding, from the CARES Act or other government programs, will be important to help them stay in business through June. However, the distribution process for much of that funding is currently at a standstill. Whether those businesses can hold on until summer may hinge on how quickly relief funding is dispersed.
“In terms of recovery, it’s unlike natural disasters in that the infrastructure is still in place, so the key will be twofold,” says Alignable’s Eric Groves. “One, the speed and efficiency of getting relief funding to the businesses that need it to survive through to the other side. Two, getting to the other side will be governed by consumer confidence, which in my opinion, is tied directly to a reduction in the case counts enabled by the mass distribution of the vaccines.”
In Alignable’s survey, small business owners pointed out that the only way to get to the next stage in economic recovery is for consumers to feel safe returning to their businesses. No amount of money from Congress will make that happen over night. It can only happen when the Covid-19 vaccines are readily available to everyone. Eighty-four percent of small business owners listed vaccine distribution as important to helping them stay in business through June. Thirty-four percent said vaccine distribution is “critical.”
With vaccine distribution plagued by a lack of funding and resources, though, there are some real questions about when those goals of being able to vaccinate everyone will actually be achieved. Until then, many businesses say they will have to hibernate to survive. Nearly half (45%) of the businesses in Alignable’s survey said they believe their businesses will reopen with the same level of products and services they offered prior to Covid sometime in May.
In the meantime, business owners plan to continue applying for outside funding and grants as a way to combat the significant drop in customer traffic they’ve seen for nearly a year. More than 70% of businesses report Q4 revenues that were lower in 2020 than 2019, with 47% collecting 50% or less of what they earned the year prior. While they wait for additional rounds of PPP relief to fill that void, SMBs are also looking at developing newer revenue stress, and a growing number report feeling “cautious optimism” about what’s to come.
“Small business owners have been among the hardest hit by the global pandemic, yet also some of the most resilient,” says Patrick Pulvermüller, president of the partners business at GoDaddy. “At the beginning of the pandemic, I would say that pivoting a physical store to online was one of the biggest transitions small business owners across the nation had to make in order to stay open … Especially for businesses that are typically brick-and-mortar, finding new and creative ways to bring in new revenue streams online has been an uphill battle.”
Stephanie Miles is a senior editor at Street Fight.