Are we or are we not seeing light at the end of the pandemic tunnel? Not very clear according to the recent survey conducted by Goldman Sachs of the 2,140 small business owners who are part of Goldman Sachs 10,000 Small Businesses Voices. While Main Street businesses are recovering, small businesses remain on edge about maintaining payroll through the summer without additional relief.
The survey conducted in early April revealed that 77 percent of small business owners expect to exhaust their second round of PPP funding by the end of June and only 26 percent expect to be able to maintain payroll without additional relief.
While small business owners are heartened by the vaccination rollout that is bringing customers back to their favorite local establishments, their concerns about access to capital are very real, according to the survey. This suggests the recovery remains fragile, particularly in the small business segment of the economy.
The survey yielded insight on the standing of small businesses today in comparison to where they were a year ago when the pandemic began rolling through the country.
- A year ago only 39 percent of respondents were open for business versus 84 percent now reporting they are fully open and 15 percent are partially open,
- Small business owners are 21 percent more confident of their business’ survival, 89 percent in April 2021 versus 68 percent in April 2020, and
- 80 percent of respondents report they have had the opportunity to be vaccinated with 67 percent having received it.
One of the strongest areas of response in the study is the 71 percent who say that COVID-19 will impact their business operations in the long-term. The two most prominent instances of this is that 55 percent expect their business model will permanently change and 53 percent expect their employees will continue to work from home more than before the pandemic.
The survey suggests there are warning signs to be watched for a stalling of the recovery. While ninety-one percent of small business owners who qualified and applied for the Payroll Protection Plan’s (PPP) second round have received their funding, 77 percent expect to exhaust their second round of PPP funding by the end of June and approximately one quarter feel they will be able to maintain payroll if no further relief is given.
“Even as optimism increases, the stark reality is that COVID-19 has forever changed the landscape for small businesses – in ways big and small. After a year with significant challenges, a full recovery for small businesses is not yet in sight and the reality is the majority of small business owners surveyed expect to need additional aid to maintain payroll through the summer,” said Jessica Johnson-Cope, Chair of Goldman Sachs 10,000 Small Businesses Voices National Leadership Council and owner of Johnson Security Bureau in New York. “
The full survey conducted by Babson College and David Binder Research is available at gs.com/doors-opening-but-not-in-the-clear.
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