Fears of Main Street business failure rise again amid pandemic – tech2.org

Fears of Main Street business failure rise again amid pandemic


Margaux & Max has been able to stay afloat with Dinges’ Facebook live streams and creative marketing, even as the retail store remains closed for in-person purchases.

Photo: Je Donna Dinges

Small business owners have faced a minor whiplash over the past year when Covid-19 swept the nation, with restrictions leading to closures, reopens, and limited operations in markets across the country at the discretion of state and local leaders. .

The new data from the CNBC small business survey | SurveyMonkey Q1 2021 finds that the experiences of Main Street entrepreneurs reflect this period of unpredictability.

While just over half of small business owners say they have been able to stay open during the pandemic, 20% of small business owners say their businesses temporarily closed as a result of the pandemic and have since reopened, but only with a limited capacity. Additionally, 10% of small business owners say they have closed and have not yet reopened. Another 4% say they have closed, reopened, and then closed again.

The back and forth has weighed on small business owner sentiment and prompted the Main Street community to express strong support for President Biden’s $ 1.9 trillion Covid relief plan, according to the survey, which was released. conducted among 2,111 small business owners nationwide from January 25 to January 25. 31 using the SurveyMonkey platform.

Je Donna Dinges relaunched her clothing and accessories boutique, Margaux & Max, in a new and larger location in early March 2020. Within days, Covid cases began to rise across the country and the store based in Ferndale, Michigan closed.

Je Donna Dinges opened in a new and larger location with her boutique, Margaux & Max, just as Covid began to spread across the US Within days it had to close in March 2020.

Je Donna Dinges

He has yet to reopen his retail store for in-person business, a conscious choice for Dinges as he has an autoimmune disease and wants to limit his exposure. But the entrepreneur is not discouraged. To stay afloat, he is live streaming the fashion shows he presents from his store on Friday nights on Facebook, presenting his mannequins of different sizes with clothing and accessories. His customers tune in, Dinges said, and then shop and pick up their purchases on the sidewalk during the week.

“I am very concerned about my own health … and I am also very concerned about my clientele,” Dinges said. “I made the decision to stay closed, but not to close the business.”

More broadly, small business sentiment dropped to a new low in the first quarter, according to the CNBC survey. Confidence fell from a score of 48 to 43 quarter-over-quarter, the lowest since CNBC and SurveyMonkey began tracking Main Street confidence in 2017. Also, the number of small business owners who say they believe they can continue operating for over a year it fell from 67% in the fourth quarter to 55%.

Confidence levels varied by race of business owners. CNBC’s survey finds that fears of a permanent closure are high among black small business owners, with 37% saying they can survive more than a year under current conditions, compared to 59% of small business owners White businesses and 55% of Hispanic small business owners.

Black-owned businesses that have yet to reopen after temporarily closing due to the pandemic (25%) compare to 8% of small, white-owned businesses.

Despite the challenges, the survey’s Small Business Confidence Index reveals that black small business owners remain optimistic with an overall small business sentiment score higher than their peers.

The Paycheck Protection Program has been a lifesaver for some, but adjustments were made to the program after an outcry from some businesses and advocates last year that the PPP did not serve smaller and minority borrowers. In January, when the $ 284 billion program was relaunched, community financial institutions that typically serve smaller businesses or that may be mission-based received the first access to the portal.

So far, more than $ 103 billion has been approved for more than 1.4 million small business loans, according to the Small Business Administration. The SBA says that 82% of all loans went to businesses that applied for less than $ 100,000, indicating that smaller businesses were applying for help. In addition, almost a third of the loans went to businesses in rural communities. Approval times have been extended with anti-fraud measures in place, and loans are no longer approved on the day of last year as they were last year.

Small neglected businesses

Administration officials have said they believe the money for the APP will not run out as it did in April 2020 when the program was first launched, and lawmakers continue to push for transparency around the demographic profiles of companies. applying for loans. President Biden has promised to include help for underserved small businesses in his $ 1.9 trillion pandemic package in the form of grants and funding, as the small business community will likely need an ongoing lifeline when the PPP closes in March.

“If the management actually gets grants directly to businesses and business owners, that will really help the capital and working capital of those businesses rather than effectively acting as a pass-through for their employees, which of course It was the intention of the PPP. It is invaluable in its own way, “says Brian Blake, director of public policy for the Association of Community Development Bankers.

Dinges said he had trouble accessing APP funds last year, eventually turning to Kabbage for a small business loan after previous denials. You are considering applying for a second draw loan this year and are optimistic about the future, despite the ongoing challenges. Its sales are down nearly 40%, but it could be a lot worse given how much Main Street has endured in the last year.

I definitely feel hopeful. While driving through my community, I see empty storefronts, which is sad. But I’m seeing empty storefronts from major retailers, “Dinges said.” And I was just amazed that these big retailers are closing down and I’m still on my feet … the loyalty I get from my customers really touches me. “

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