Swing states hit as coronavirus rips small businesses
New findings from the U.S. Census Bureau paint a bleak and detailed picture of how coronavirus is hitting small businesses.
The big picture: Half describe major suffering, nearly half don’t have enough cash to go more than a month, and the worst-hit state — Michigan — also is a key battleground for the November election.
- The data released Thursday is the first installment of a nine-week survey of small businesses that the Census says may be used to help policymakers, businesses and researchers address challenges brought on by the pandemic.
Why it matters: Small business is at the heart of the U.S. economy. The virus' damage varies by state and industry, but majorities of small businesses reported revenue declines, cuts to employee hours and requests for federal aid.
- Small businesses — firms with 500 or fewer workers — make up 99.7% of employer companies in America, according to the Small Business and Entrepreneurship Council, an advocacy group.
How it works: The Census Bureau is sending the survey to roughly 885,000 non-farm, single-location employer businesses with fewer than 500 employees and receipts of $1,000 or more in 50 states, the District of Columbia and Puerto Rico.
What they're saying: Thomas Sullivan, vice president of small business policy for the U.S. Chamber of Commerce, tells Axios the survey reflects what he's hearing.
- "There have been more calls of sheer desperation in the last two weeks than in the last two months," Sullivan says, choking up as he describes his conversations with small business owners.
- "I'm not talking about equity ownership or cashing in 401(k)s. I'm talking about food stamps, cutting down to one meal a day, not knowing if someone will have access to pay this month."
Impacts vary widely by sector. The findings were worst for the "food and accommodation" category of small businesses that included mom-and-pop restaurants, coffee shops, bars and B&Bs: 83.5% say the coronavirus is having a large negative effect on them.
- Around one in three small businesses in construction, finance and utilities sectors said the same.
Between the lines: In a presidential election year, it's noteworthy that four large battleground states — Florida, Ohio, Michigan and Pennsylvania — are among the states where small businesses report being hit hardest.
- Michigan's small businesses have taken the biggest hit of any state, with 65% saying the virus had a large negative effect on their business. In Michigan, 80% report decreased revenues, while 59% have had temporary closures and 35% are cutting the number of paid employees.
Other states or territories hit particularly hard are New York, New Jersey, Massachusetts and Puerto Rico.
- New York and New Jersey have the most COVID-19 cases and deaths compared to other states — numerically and per capita, per the New York Times.
- While the vast majority of small businesses have yet to miss scheduled loan or other payments so far, small businesses in New York are more likely than in other states to say they had missed a non-loan payment (35%).
By the numbers: Nationally, 74% of the small businesses surveyed said they had revenue declines because of the coronavirus.
- 41% had to close at least one of their business locations for at least one day.
- Only 17% of small businesses report having enough cash on hand to maintain business operations for three months or more; 48% only have enough for four weeks or less.
- 75% of small business requested assistance through the Paycheck Protection Program; only 38% had already received it.