Reimagine Main Street and its partners fielded a national survey of small business owners from April 28-May 12, 2021 to provide insights into how small businesses are faring and to understand what they expect the near future to bring.
The COVID-19 pandemic was an economic shock to small firms and the effects were not easily predictable. An unprecedented number of establishments closed at least temporarily, jobs are rebounding but have not yet reached pre-pandemic levels, proprietor’s income rebounded quicky, and business bankruptcies seem unaffected so far. Financial conditions have improved and remain accommodative to economic growth. Meanwhile, financing remains reasonably tight for small businesses with subpar credit scores.
A new issue brief from the Office of Advocacy, “The Effects of the COVID-19 Pandemic on Small Businesses,” examines the effects of COVID-19 on small businesses using the first sets of available economic data. The economic impact of the pandemic varied from place to place, with metropolitan and coastal areas hardest hit. Additionally, some industries suffered more than others, with the largest declines in restaurant and taxi and limousine services. Disproportionate metropolitan impacts contributed to differences across demographic categories, with Black and Asian business owners suffering the most.
The publication of this report seeks to document the toll the COVID-19 pandemic took on small businesses in 2020. At the time our survey was fielded, six months into the pandemic, closures, layoffs, depressed revenue, and uncertainty continued to plague small businesses across the country. Small business debt mounted and business owners plowed their personal savings into their firms to keep them afloat.
The Office of Advocacy’s Small Business Economic Bulletin for December examines how small businesses have been faring during the COVID-19 pandemic. Overall self-employment levels have been relatively steady, but income changes from small business owners have been choppy. Additionally, the lack of recent data on business closures makes it difficult to assess the overall state of small business.
The Small Business Pulse Survey (SBPS) measures the effect of changing business conditions during the Coronavirus pandemic on our nation’s small businesses. SBPS complements existing U.S. Census Bureau data collections by providing high-frequency, detailed information on the challenges small businesses are facing during the Coronavirus pandemic.
The Aspen Institute Financial Security Program has, for five years, tracked the challenges that face American households and learned from the leadership and example of our partners in the field. They have taken a step back to take stock of what leaders have learned over the past five years. The result is their new framework and an updated vision for the financial security field.
The COVID-19 pandemic has disproportionately impacted metropolitan areas, which have seen a higher rate of small business closures than non-metropolitan areas. However, in recent weeks, the New York City metropolitan area has reopened faster than the national rate. Read “Small Business Facts: Pandemic Pressures City Businesses” to learn more.
Small Business Majority’s latest survey reveals that the uncertainty of whether more help will arrive has left too many small businesses on the brink of collapse.
The survey finds that without additional funding, more than 1 in 3 (35%) small business owners will not survive past the next three months. The number is even higher for small business owners of color: an astounding 41% of Black and Latino-owned businesses won’t make it through the next few months without additional financial support. And 1 in 5 small business owners report they’ve considered filing for bankruptcy.
Given current market conditions, it is clear that absent major federal interventions, whole
swathes of the small-business sector will never return, minority business owners will suffer
more than their fair share of the burden, and entrepreneurship levels will remain depressed for a
generation or more. But the collision of these forces—COVID-19, economic consolidation, and
deep racial inequality—also create a window of opportunity for significant reform. This report
provides a five-step roadmap towards a more inclusive, dynamic, and productive small-business sector. We break down the five steps into ten major policy recommendations. While the
federal government must take the lead for many of our recommendations, we also suggest how it
can galvanize the full energy of public, private and civic institutions.