The National Federation of Independent Business Research Center released a new nationwide survey Wednesday that underscores how difficult the last six months have been for struggling small businesses across the country, including here in Maine. The survey highlights the hardship small businesses have had to endure, and will continue to endure, as a result of states’ misguided response to the coronavirus pandemic.
As we know, it isn’t the big box chains or online retail stores that have suffered throughout the pandemic. These businesses were allowed to continue operating during the lockdowns ordered by state governors, while small mom and pop stores, which comprise the bulk of Maine’s economy, were ordered to close. This is as true in Maine as it is in every other state, with the exception of the small handful of states where their governors never ordered a full-scale lockdown.
According to the survey results, one-in-five small businesses anticipate having to lay off employees within the next six months. A majority of businesses surveyed (86%) have used all of the funding they received from the Paycheck Protection Program and are preparing to apply for loan forgiveness.
“It has been over six months from the onset of the health crisis and economic shutdowns and small businesses are still struggling,” said Holly Wade, Executive Director of NFIB’s Research Center. “Owners are trying to reduce costs and adjust business operations to keep their doors open, but for many, that’s not enough.”
Despite this assistance, 22% of recipients said they anticipate having to lay off employees in the next six months and nearly half (49%) of borrowers think they will need additional financial support over the next 12 months to stay afloat. If eligible, 44% of small business owners said they would apply or re-apply for a PPP loan if the program is extended.
Another alarming finding from the survey is that sales levels remain at 50% or less of pre-crisis levels for roughly one-fifth of small businesses. According to the breakdown provided by the NFIB Research Center, 28% of businesses are at sales levels 50%-75% of pre-crisis levels, 37% have returned to normal sales levels and 17% are reporting sales that exceed pre-crisis levels.
For most small business owners surveyed, business conditions are not expected to improve until next year at the earliest. Only 10% of owners expect conditions to improve back to normal levels by the end of 2020 while 60% expect a recovery to come in 2021 and 20% anticipate a complete recovery in 2022.
There is no question that Governor Mills’ statewide lockdown hurt Maine’s economy, small businesses, unemployment rate and labor force participation rate. If the governor seeks to shut down our state again as we approach the colder winter months and traditional flu season, there is little doubt these effects will be even greater.