Business & Investment

Pandemic whipped cream raises the risk of main street business failure again

Margaux & Max was able to maintain Dinges’ Facebook live stream and creative marketing while retailers were closed to shop directly.

Photo: Je Donna Dinges

Small business owners suffered a bit of whiplash last year due to closures, reopenings, and restrictions leading to limited business in national markets, at the discretion of state and local leaders, as Covid-19 swept the country. Faced with.

New data for the first quarter of 2021 CNBC | SurveyMonkey SME Survey The experience of main street entrepreneurs has been found to reflect this unpredictable time.

Over half of small business owners say they were able to stay open throughout the pandemic, but 20% of small business owners temporarily closed their businesses as a result of the pandemic and then reopened. He said he did, but the capacity is limited. In addition, 10% of small business owners say they have shut down and have not yet resumed. Another 4% said they shut down, restarted, and then shut down again.

Have back and forth Focus on the emotions of small business owners According to a survey of 2,111 small business owners nationwide from January 25 to January, the main street community has expressed strong support for President Biden’s $ 1.9 trillion Covid rescue program. It was. Using 31 SurveyMonkey platform..

Je Donna Dinges renewed its clothing and accessories boutique Margaux & Max in a new big location in early March 2020. Within a few days, Covid cases began to increase nationwide and the Ferndale, Michigan-based store was closed.

Je Donna Dinges has opened in a new big location with her boutique, Margaux & Max, just as Covid began to spread across the United States within a few days of having to close in March 2020.

Je Donna Dinges

She has not yet reopened the retail store for her personal business. She has an autoimmune disease and wants to limit her exposure, so it’s a conscious choice for Dinges. But entrepreneurs never stop. To float, she’s livestreaming a fashion show from the shop on Facebook on Friday night, wearing mannequins of various sizes with clothing and accessories. According to Dinges, her customers shop during the week and receive the purchased items on the porch.

“I’m very worried about my health … and I’m also very worried about my customers,” Dinges said. “I stay closed, but decided not to go out of business.”

In a broader sense, SME sentiment fell to new lows in the first quarter, according to a CNBC survey. Confidence dropped from 48 to 43 every quarter. This is the lowest since CNBC and SurveyMonkey started tracking main street confidence in 2017. In addition, the number of small business owners fell from 67% in the fourth quarter to 55% in the year.

Confidence depends on the race of the business owner. According to a CNBC survey, black small business owners are at high risk of a complete closure, with 37% saying they can survive for more than a year in the current situation, while white small business owners 59 %, 55% of Hispanic SME owners.

Black-owned businesses (25%) that have not yet reopened after being temporarily closed due to a pandemic are compared to 8% of white-owned SMEs.

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

The paycheck protection program was a lifeline for some, but last year it was followed by protests from some companies and supporters that PPP did not serve small, minority borrowers. Has been fine-tuned. When the $ 284 billion program resumed in January, it typically served small businesses or allowed mission-based community financial institutions the first access to the portal.

To date, more than $ 103 billion has been approved for more than 1.4 million SME loans, according to the Small and Medium Business Administration. According to the SBA, 82% of all loans are directed to companies demanding less than $ 100,000, indicating that SMEs are seeking help. In addition, nearly one-third of the loans went to businesses in local communities. The anti-fraud measures have extended the approval period and the loan is no longer approved on the day as it was last year.

SMEs not receiving sufficient service

Government officials believe that PPP will never run out of money, as it happened in April 2020, when the program was first launched, and lawmakers continue to seek transparency on the demographic profile of borrowers. Said. President Biden said underserved SMEs, both in the form of grants and financing, as the SME community may need a continuous lifeline when the PPP ends in March. He promised to include his aid in his $ 1.9 trillion pandemic package.

“If the government actually receives a grant directly from a company or business owner, it does not effectively act as a pass-through to employees, but actually supports those companies’ capital and working capital. Intent. It’s invaluable in itself, “said Brian Blake, Public Policy Director of the Community Development Bankers Association.

Dinges said last year that he struggled to access PPP funds and, after a prior refusal, eventually asked Kabbage for a loan to a small business. She is considering applying for a second draw loan this year and feels optimistic about the future despite ongoing challenges. Her sales have fallen by almost 40%, but given what Main Street has endured last year, it could be even worse.

“”I definitely feel hope. It’s sad to see an empty storefront while driving a community. But I’m looking at an empty storefront of a major retailer. And I noticed that these large retail stores were collapsed. I’m still standing … The loyalty I get from my clients really impresses me. “

Pandemic whipped cream raises the risk of main street business failure again

https://www.cnbc.com/2021/02/12/main-street-business-failure-fears-rise-again-in-pandemic-whipsaw.html Pandemic whipped cream raises the risk of main street business failure again

Back to top button