Alignable: 45% Of Small Businesses Fear Closing Before COVID's Contained

DATA INSIGHTS | TREND TRACKER | Despite recent moves by the Biden Administration to expedite vaccine distribution and adjust the PPP to reflect the needs of the most disadvantaged groups, 45% of the small businesses we polled last week say they remain "highly concerned" about keeping their businesses afloat through the end of the pandemic.

Another 30% say they're "somewhat concerned," which tells us that three-quarters of small businesses have some degree of anxiety about staying in business before vaccines take effect across the U.S. population and a new normal can begin (hopefully, by the end of Q2).

Even more startling, only 16% say they're doing fine and have no worries about keeping their businesses alive through the rest of this very unstable period.

These findings emerged after conducting the Alignable Small Business Confidence Poll last week (3/13-3/17/2021) among 5,306 small business owners. 

Reasons For Extended Pessimism

Examining the comments from small business owners taking our poll, along with supporting statistics from other recent surveys, it's clear to see why small business confidence around a robust, rapid recovery remains low.

First, this data helps to paint a more complete picture that shows some economic milestones are getting worse, not better:

• 41% of SMBs have a month or less of cash reserves left (up from 32% last month)
• 49% of SMBs couldn't pay March rent in full, on time (up from 38% in February)
• 74% of small business owners are struggling to receive PPP funds (though 26% say the PPP has been fast and easy). 

These three data points certainly demonstrate why small businesses remain worried. But the situation becomes even clearer examining just a few  polltaker quotes:

"The PPP loan is hard to get. We're SO FRUSTRATED! We train first responders and may not make it!"

"Our medical business likely will not survive if COVID persists and we continue to be denied for the PPP.  Because my employees are 1099, they lose out and we lose out, and so does our business. It's really frustrating when I am an ER doctor who has worked on the front lines this entire time to help fight COVID, and my American dream of having a business practice is suffering."

"I am diverting into e-commerce, but obviously it takes a lot of time and a lot of money. And I am not sure I can survive if it doesn't start producing results soon. I applied for a second PPP loan as soon as it opened, but still I have not received anything.

"I Want My Business Back!"

 "I worked hard for 30 years to make my B&B successful. Now I sit here day after day with maybe one or two people coming in. It is boring and depressing. I want my business back!"

"2019 was not a great year. Last year was better for my carpet cleaning business, but now I don't qualify for the PPP when I really need it. In the first two months of the year, I also had COVID. I lost a lot of jobs because of it, and now when I really need the PPP, they won't give it to me. The system stinks." 

"This application is a total nightmare."

While these statements cut across all demographics polled, as we've seen in other surveys over the past year, even more minorities and women are concerned about staying afloat than their peers.

Majority Of Minorities & Women Are Even Less Confident

As you can see in this graph, 59% of minorities and 50% of women who own small businesses are afraid their shops, offices, or online portals will run out of cash and be forced to close forever before they can put the COVID Era behind them.

As this chart demonstrates, 44% of veteran-owned businesses are at risk, as well. And small business life isn't exactly thriving these days for other demographics we poll regularly, either. But, as we've found over the past year, men-owned and nonminority-owned businesses are not as negatively impacted as those owned by minorities or women. 

Unfortunately, based on this poll, it doesn't look like efforts from Washington -- to help ensure that more minorities and women receive the PPP funds they deserve -- have been effective, at least not yet. Perhaps an entirely different program for these disadvantaged groups needs to be created and implemented -- a suggestion from several small business owners we've polled. 

Digging Deeper On Industries

Looking into the confidence levels of small businesses in different industries, the patterns for many of them continue to show low confidence in a recovery in the near future. In some cases, they're even less optimistic than minorities or women who were polled. 

Reviewing the chart below, nearly two-thirds of the owners at beauty salons/barber shops (63%), catering operations (63%), or photography studios (60%) feel that they are at risk, especially if they don't receive the PPP funds they need. 

As we've seen before, entertainers (56%), gym owners (54%), restaurant/bar owners (52%), retailers (49%) and those in the travel/lodging sector (47%) aren't far behind. These numbers are similar to what we found when asking small business owners in these industries about their cash on hand challenges a month ago. 

Focusing On State Statistics

Finally, we've found a similar story when looking at what's happening in key states, and we're not seeing dramatic differences between states that are "wide open" now such as Florida and Texas, and others that are more conservative in lifting COVID restrictions. Perhaps the rising COVID cases in some of the less cautious states have tempered earlier optimism, as well. 

In any event, here's the small business confidence landscape in many key states. These figures show the percentage of small businesses polled that are "highly concerned" their companies will not survive the rest of the COVID Era.

New York leads with 54%, which means a majority of small business owners there believe they're at risk of financial failure in the next few months.  

And here are the percentages of SMB owners in a variety of other states that also question their ability to stay afloat before COVID's contained:

• MD -- 50%
• CA -- 49%
• NJ -- 49%
• VA -- 49%
• FL -- 48%
• GA -- 47%
• OH -- 46%
• TX -- 45%
• AL -- 44%
• NC -- 43%
• SC -- 43%
• TN -- 43%
• IL -- 41%
• MA -- 40%
• MI -- 40%
• WA -- 40%
• PA -- 37%
• WI -- 34%
• CO -- 32%

So, as you can see, these numbers are still rather alarming, showing that help might not come fast enough for a large number of small businesses.

To see other polls we’ve conducted since March 2020, please go to the Alignable Research Center.

ABOUT THE ALIGNABLE RESEARCH CENTER

Alignable is the largest online referral network for small businesses with over 6 million members across North America. 

We established our research center in early March 2020, to track and report the impact of the Coronavirus on small businesses, and to monitor recovery efforts, informing the media, policymakers, and our members.

For more details about any of these findings, including the methodology behind our latest polls, please contact Chuck Casto at chuck@alignable.com.