- Approximately 3 out of 4 owners would apply (or would consider applying) for a second round of the Paycheck Protection Program;
- Approximately 1 in 3 owners said the extra unemployment benefits made it hard to hire (or rehire) workers;
- Approximately 1 in 5 owners fear they will close if economic conditions don’t improve in the next six months;
- Approximately 1 in 5 owners feel legal action related to COVID-19 is a serious concern.
Eileen Kean, the state director of NFIB in New Jersey, said she isn’t surprised.
“Many state small businesses were hard hit and unable to come back financially with restrictions still in place and consumers hesitant to patronize certain types of businesses,” she said. “The travel and entertainment industries continue to suffer, and small restaurants still can’t make a profit with no diners allowed indoors. Financial assistance is still needed from state and federal government if they are going to survive this economic crisis.”
Holly Wade, NFIB’s director of research and policy analysis, said the health crisis is not impacting small businesses equally.
“Small businesses are adapting to the abrupt shifts in consumer spending, managing customer and employees’ health and safety, and complying with state and local mandates, which are all creating additional stress for small business owners,” she said. “Many of them still need more financial assistance just to keep their doors open and staff on payroll.”
Key findings from the survey include:
Most PPP borrowers (84%) have now used their entire loan, up from 71% in July.
- The remaining 16% of borrowers are likely not far behind on spending;
- Most PPP borrowers (81%) applied for the loan through the financial institution that they normally use for business purposes;
- About 43% of borrowers plan to use the EZ form when applying for loan forgiveness,
More than a third (35%) of respondents have applied for an Economic Injury Disaster Loan, or EIDL.
- Nearly three-quarters (74%) were approved for a loan and 9% were denied;
- About 18% still have not heard yet about the status of their loan application;
- Of those who applied for an EIDL loan, 22% of loan applicants are “very satisfied” with the EIDL program overall and another 44% were “satisfied.”
Almost half of PPP loan borrowers (47%) anticipate needing additional financial support over the next 12 months.
- If eligible, 44% of small business owners would apply or reapply for a second PPP loan;
- Another 31% would consider applying for one.
Sales levels remain at 50% or less than they were pre-COVID for about 1 in 5 employers.
- Another 28% report sales levels of 50-74% from pre-crisis levels;
- Half (50%) are nearly back to where they were, with some (14%) exceeding pre-COVID sales levels.
About 1 in 5 (21%) small business owners report they will have to close their doors if current economic conditions do not improve over the next six months.
- Another 19% of owners anticipate they will be able to operate no longer than 7-12 months under current economic conditions;
- Over half (61%) are better situated and do not anticipate any near-term problems.
Most small business owners do not expect business conditions to improve to normal levels until next year at the earliest.
- Only 19% of owners anticipate conditions improving to normal levels by the end of the year;
- 6% of owners say conditions are back to normal now;
- Over half of owners (52%) anticipate it taking until sometime in 2021, and 20% believe sometime in 2022.
The CARES Act provided additional financial assistance of supplemental unemployment insurance benefits through July 31. The program presented a significant challenge to some small business owners.
- About one-third (32%) of small business owners reported that the extra $600 per week has hurt their business by making it harder to hire or rehire workers;
- However, the UI program also has helped support customer spending, with 9% of owners feeling like they benefited from the program by it putting more money in their customers’ pockets;
- 3% of owners said they had to offer a higher wage to encourage a worker to come back to their job, and 4% reported having an employee agree to continue working, but only with reduced hours in order to also receive the $600 per week benefit.
The threat of legal action against small business is a serious concern for 21% of owners and a moderate concern for another 34% of owners.
- Just under one-third (31%) are not too concerned, and 14% are not concerned at all, likely due to limited contact with the general public or having few employees, if any.
About 1 in 5 (21%) small employers have had an employee take COVID-19-related paid sick leave or family leave as mandated and offered through the Families First Coronavirus Response Act, or FFCRA.
- Only 30% of employers have claimed the tax credit or an advance refund for reimbursement of these costs.
These results come from NFIB’s 11th Small Business COVID-19 survey, assessing the health crisis’ impact on small business operations, economic conditions and utilization of the targeted small business loan programs. The first series was published in early March 2020, with subsequent publications every 2-3 weeks, found here. The full survey is available here.