The 16th survey by the research center of the National Federation of Independent Business since the COVID-19 pandemic overtook the country shows the outlook for small business is getting slightly better.
Of course, it’s all relative. The key data point for this conclusion: Fewer of them feel as if they are in danger of closing by the end of the year.
Thirteen percent of small business owners report that they will have to close their doors if current economic conditions do not improve over the next six months, down from 25% in December.
That’s progress. But it comes with many warning signs, NFIB New Jersey State Director Eileen Kean said.
“While it is encouraging that more businesses are confident in their financial ability to keep their doors open, retail, gyms, restaurants and other business are still only open to 50% capacity,” she said. “Meanwhile, New Jersey has the highest rate of new COVID-19 cases in the United States and Gov. (Phil) Murphy is not lifting restrictions.
“The Main Streets of New Jersey are still in very vulnerable shape.”
In fact, only 11% of those survey feel business is back to pre-pandemic levels.
Key findings in the survey include:
- The economic outlook has improved slightly over the last few months, with 11% of owners reporting that conditions are back to normal now, a six percentage-point improvement from late January.
- 12% of owners anticipate it taking until the first half of 2021 for economic conditions to improve and 34% anticipate sometime in the second half;
- About one-third (32%) of owners are less optimistic and expect conditions not to fully improve until sometime in 2022, and 11% after 2022.
- Sales levels are 50% or less than they were this time last year (2020) for 22% of small businesses, with another 21% at sales levels of 51-75% of pre-crisis.
- 35% of owners are back or nearly back to where they were, with sales between 76%-100% of levels in 2019, with another 23% exceeding sales levels during this time in 2019.
- Almost three-quarters (74%) of 2020 Paycheck Protection Program borrowers have applied for loan forgiveness.
- 12% of borrowers are not yet ready to apply for forgiveness, and 16% are ready but their lenders are not yet accepting applications;
- 73% of those who have applied for PPP loan forgiveness have received final confirmation of their approved forgiveness amount from the SBA.
- Of those businesses who received a first-draw PPP loan in 2020, 42% have already applied for a second-draw PPP loan, and 2% are planning to apply for one.
- Another 7% are considering whether to apply for a second-draw PPP loan or not.
- Of those businesses who did not receive a first-draw PPP loan in 2020, 20% have applied during the second round.
- 14% are planning to apply or are considering applying;
- The remaining 66% are not planning to apply for a second-draw PPP.
- The America Rescue Plan Act of 2021 extended the Employee Retention Tax Credit through the end of 2021; however, still very few employers know that it exists.
- Only 7% of small business owners are very familiar with the program and another 35% are somewhat familiar;
- 17% of small employers have taken or plan to take advantage of the tax credit in 2021;
- Nearly half (47%) of small employers report that they might take advantage of the tax credit in 2021, presumably after they learn more about the program.
- As more of the general population is eligible to get the vaccine, 45% of small employers will encourage their employees to get vaccinated and 2% report that they will require their employees to be vaccinated.
- Another 5% of small employers are considering encouraging or requiring the vaccination;
- 26% of small business owners have been vaccinated and another 23% plan to get vaccinated as soon as it’s available to them, while 16% report that they will also get vaccinated, but not right away;
- 35% report that they will not get vaccinated, lower than the 44% who reported the same in December.
This publication marks NFIB’s 16th 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.