Quarter of Small Businesses Are on Brink of Permanent Closure – US Chamber Poll
WASHINGTON, D.C. — A new poll released today from the U.S. Chamber of Commerce and MetLife reveals that one in four small businesses (24%) say they are two months or less from closing permanently amid the economic downturn caused by the coronavirus pandemic.
One in 10 (11%) are less than one month away from permanently going out of business, according to the poll, which was taken from March 25 to 28.
Additionally, about one in four (24%) small businesses have already shut down temporarily in response to COVID-19. Among those that have not, 40% say they are likely to close at least temporarily within the next two weeks. This means a total of 54% of all small businesses report that they have closed or expect to close temporarily in the next 14 days.
When asked what proposals might offer the most relief, small businesses indicated support for three key provisions included in the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act:
- 56% of small business say direct cash payments to Americans would be the most helpful form of aid from the government,
- followed by loans and financial aid (30%), and
- suspending payroll taxes (21%).
“As the poll results show, small business owners are looking for loans and financial aid to ensure they do not have to shut their doors or go bankrupt because of the coronavirus. American banks are ready to help, but they need clear guidelines from the Administration,” said Neil Bradley, chief policy officer at the U.S Chamber. “American banks will be on the front lines to help businesses survive during this pandemic.”
Looking toward the future, small businesses see some grounds for optimism. Almost one in four (23%) small business owners expect to hire in the next year.
“This is an extraordinarily difficult time for small business owners across the country. Many are facing significant disruptions and as the data show many are on the brink of closure,” said Christel C. Slaughter, CEO of SSA Consultants and U.S. Chamber Small Business Council chair. “While it is difficult to predict the future, the CARES Act provides much needed aid and small business owners who can retain their core customers and top employees will be able to rebound more quickly.”
The full report relays findings on small business owners’ level of concern, changes they are making in order to continue operating, resources and relief programs needed over the next couple of months, and predictions on when the U.S. small business climate will return to normal.
Key findings include:
- 43% of small businesses say they are three- to six months away from permanently shutting down, 24% say they are two months or less from closing permanently, and 1 in 10 that say they are less than one month away from permanently shutting down.
- 24% of small businesses report having temporarily closed their business in the last two weeks.
- Among those who haven’t temporarily shut down yet, 40% report it is likely they will do so within the next two weeks. This means a total of 54% of all small businesses are reporting they have closed or could close within the coming weeks.
- 54% of small business owners now rate the overall health of the U.S. economy as “poor,” and 32% feel the same about their local economy.
- 59% of small business owners feel comfortable with their cash flow, compared to 80% last quarter.
- The most common business responses to the COVID-19 disruption are shortening hours of operation (30%), temporarily closing (24%), and adjusting employee salaries or hours (17%).
- 84% of small business owners say they are concerned about the impact of the coronavirus outbreak on their business, and a majority (58%) are very concerned, especially those in the Northeast and in the service industry.
Research for the report was conducted by Ipsos from March 25 – 28, 2020. CLICK HERE to read the full report.
SOURCE: U.S. Chamber of Commerce.
Published by The Business Journal, Youngstown, Ohio.