In a survey of small business owners published today by the NFIB Research Center, the economic strain on small businesses appears to be easing just slightly for some owners. Fifteen percent of small business owners reported they will have to close their doors if economic conditions don’t improve soon, down from 25% two months ago.
“The reopening of the Paycheck Protection Program is likely a main factor in the decrease of those anticipating having to close their doors soon but still, the economic recovery remains uneven for small businesses,” said Holly Wade, Executive Director of NFIB’s Research Center. “Fortunately, more businesses are reporting stronger sales and those negatively impacted by state and local restrictions are receiving additional financial help.”
This survey was conducted after the Consolidated Appropriations Act of 2021 (CAA) was enacted in December. The CAA reopened and modified targeted federal programs established to help small businesses, such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program, broadening businesses’ eligibility for the Employee Retention Tax Credit (ERTC), and more.
Key findings from the survey include:
- Almost two-thirds (63%) of 2020 PPP borrowers have applied for loan forgiveness.
- Of those owners who did not receive a first-draw PPP loan in 2020, about one-third have either applied for a first-draw PPP loan in 2021 or are planning to apply.
- Of those owners who did receive a first-draw PPP loan in 2020, 30% have already applied for a second-draw PPP loan and 23% are planning to apply or considering it.
- The CAA broadened the eligibility for the Employee Retention Tax Credit (ERTC), however, most small employers don’t know that the ERTC exists.
- The COVID-19 pandemic severely impacted almost all small businesses at the onset, but since then the economic recovery has been uneven.
- Fifteen percent of small business owners report that they will have to close their doors if current economic conditions do not improve over the next 6 months, down from 25% two months ago.
- Most small business owners do not expect business conditions to improve to normal levels until later in 2021 at the earliest.
- Almost half (48%) of small business employers have had an employee take COVID-19 related sick or family leave.
- As more of the general population are eligible to get the COVID-19 vaccine, 37% of small employers will encourage their employees to get vaccinated and 22% report they might encourage them to do so.
This publication marks NFIB’s 15th 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. Read the complete 15th edition survey results here.
The full series of NFIB COVID-19 surveys began in early March 2020 and can be found here.