Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
Small Business News Highlights for May 4:
- Layoffs hitting professional and public sectors
- Small business confidence crashes, indicating further economic pain in store
- “Essential” small businesses grapple with accepting PPP funds
Professional and public sectors hammered with layoffs
“The big difference between coronavirus and the Great Recession is that this has completely stopped the economy across so many sectors.”
When stay-at-home orders began washing over the country, the service and retail industries felt the impact first, shedding millions of jobs over a historically short span of time. As the curve begins to level in many places, the professional and public sectors are beginning to feel the pain of the contracting economy, however.
As cities and states face budget shortfalls, government workers are being furloughed and laid off and white-collar employees are facing similar layoffs.
Small business confidence crashes
“They are not quite sure if their customers can pay, or what customers will look like, what buying habits will come out of this, if their product will have the same appeal.”
CNBC released its Q2 survey on small business confidence and the results are unsurprisingly grim. Nearly a third of businesses have been required to close in-person operations while nearly a quarter closed altogether. 72% of SBOs report that the pandemic will likely permanently impact their business, while only 7% report being able to pivot to provide goods and services focused on fighting the outbreak of COVID-19.
SBOs debate if they should accept PPP funds
“Don’t feel like this is a handout or something that you should feel ashamed about taking if your business hasn’t been negatively impacted by it.”
Essential small businesses that have managed to stay operational during the COVID-19 pandemic and received a Paycheck Protection Program loan may seem like they’ve won the jackpot. And some of the owners are grappling whether or not they should keep the funds.
Given the lack of clarity from the federal government about who should and shouldn’t qualify for the emergency Treasury-backed loans, small business owners are left to decide whether or not they should accept the funds amidst pressure for well-off companies to return the money. Private companies are not obliged to disclose whether or not they received PPP loans, however bankers report that shipping companies, cleaning companies, defense contractors, and law firms have received money.