The NFIB Research Center has released its latest COVID-19 survey on the impact the pandemic has had on small businesses.
The National Federation of Independent Businesses reported 13% of small business owners report that they will have to close their doors if current economic conditions do not improve over the next six months, down from 25% in December.
“After a year of the COVID-19 pandemic and the challenges that came with it, small business owners are working hard to see a brighter future for their businesses,” said Holly Wade, executive director of NFIB’s Research Center. “Economic conditions seem to be easing for some, but the overall recovery remains uneven across small business industries.”
She said it “is crucial that small businesses are given the resources and flexibility needed to ensure they will have a successful recovery.”
State-specific data is unavailable, but NFIB Tennessee Director Jim Brown said the economic recovery in Tennessee continues, but “many businesses are still in desperate need of foot traffic, employees returning to work and targeted relief.”
He also said “many restaurants, hotels, small retailers and service businesses remain on the brink of closure and need our support this spring and summer.”
The latestnational survey is the 16th in a series that began in March 2020.
• Almost three-quarters (74%) of 2020 Paycheck Protection Program borrowers have applied for loan forgiveness.
• Twelve percent of borrowers are not yet ready to apply for forgiveness and 16% are ready but their lenders are not yet accepting applications.
• Seventy-three percent of those who have applied for PPP loan forgiveness have received final confirmation of their approved forgiveness amount from the SBA.
• The CAA reopened the PPP application and of those owners who did not receive a first-draw PPP loan in 2020, 20% have applied for a first-draw PPP loan.
• Fourteen percent are planning to apply or are considering applying. The remaining 66% are not planning to apply for a first-draw PPP.
• Seventy-eight percent of those who have applied for a second-draw PPP loan have been approved and 1% were denied.
• The 25% reduction in gross eligibility rule was the main factor for about three-fourths of those first loan PPP borrowers in not applying for a second-draw PPP.
• Another 17% were eligible but didn’t want to take a second loan.
• The America Rescue Plan Act of 2021 extended the Employee Retention Tax Credit (ERTC) through the end of 2021, however, still very few employers know that it exists.
• Only 7% of small business owners are very familiar with the program and another 35% are somewhat familiar.
• Seventeen percent of small employers have taken or plan to take advantage of the tax credit in 2021.
• Nearly half (47%) of small employers report that they might take advantage of the tax credit in 2021, presumably after they learn more about the program.
• Thirty-five percent of owners are back or nearly back to where they were with sales between 76%-100% of levels in 2019 with another 23% exceeding sales levels during this time in 2019.
• Thirteen percent of small business owners report that they will have to close their doors if current economic conditions do not improve over the next six months.
• Fifteen percent of owners anticipate they will be able to operate no longer than 7-12 months under current economic conditions.
• Just under three-fourths (72%) are better situated and do not anticipate any near-term problems.
• Twelve percent of owners anticipate it taking until the first half of 2021 for economic conditions to improve and 34% anticipate sometime in the second half.
• About one-third (32%) of owners are less optimistic and expect conditions not to fully improve until sometime in 2022 and 11% after 2022.
• Of those employers, 81% offered paid leave to all or some of those employees taking COVID-19 related leave and 42% of them have claimed the tax credit for reimbursement of those costs.
• Forty-five percent of small employers will encourage their employees to get vaccinated.
• Another 5% of small employers are considering encouraging or requiring the vaccination.
• Twenty-six percent of small business owners have been vaccinated and another 23% plan to get vaccinated as soon as it’s available to them.
• About 7% of small employer firms have employees who receive tips.
• About one-third of these firms report that all of their employees receive tips as part of their compensation, with another 39% of employers reporting that between 50-99% of their employees receive tips.
• Half of small employers with tipped employees report that employee tips make up less than one-quarter of their overall salary.
• About 30% say that tips make up between 25-74% of overall salary and just 9% report that tips generate 75% or more of their employees’ salaries.
• Over half (53%) of those with tipped employees are in the restaurant industry.
NFIB has been advocating on behalf of America’s small and independent business owners for more than 75 years. For more information, please visit nfib.com.