Hit Hard by the Pandemic, Small-Business Owners Await New Relief
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What federal relief package and forgivable loans are introduced for small businesses?
Here's your Money Briefing for Wednesday, December 23rd. I'm J.R. Whalen for The Wall Street Journal. The new coronavirus relief package includes $284 billion in new forgivable loans for businesses. That's welcome news for some on Main Street, but for many others, it's too little too late.
They brought employees back.
How have rising COVID-19 cases forced small businesses to cut back or shut down again?
They were operating at reduced capacity. But with cases rising, they've had to shut down again. And the problem now is I think these business owners are exhausted, but they've also run through a lot of their cash reserves, and it's just getting harder.
Coming up, our small business reporter Ruth Simon will discuss the challenges facing many small businesses this year, but also how some others are thriving. That's after the break.
A new round of forgivable loans and the latest COVID-19 relief bill will help some businesses get out from under severe financial hardship. But for many others, the financial pain caused by the pandemic, now in its 10th month, gets worse every day. Ruth Simon covers small business and entrepreneurship for The Wall Street Journal, and she's here to discuss small business struggles and how some are emerging stronger.
Why are many small-business owners exhausted and running out of cash before new aid arrives?
Ruth, thanks for joining us.
It's my pleasure.
The new COVID-19 package will definitely come as good news for small businesses, but the spread of the virus isn't subsiding. How have businesses been dealing with that?
It's been very hard for a lot of small businesses, particularly ones that depend on face-to-face interaction or are in particularly troubled industries. For instance, if you provide services to airlines, if you run a bowling alley. What we found is a lot of them have had to reduce staff. Either they furloughed them, they've laid them off. I've talked to businesses that have given up their office space, that have done whatever they can to try to survive. For example, I talked to the owner of a bowling alley in Chicago, and they had to close.
Which industries and sectors have suffered the biggest revenue and employment declines?
They did get PPP money, and they brought—that's from the Federal Paycheck Protection Program— They brought employees back. They were operating at reduced capacity. But with cases rising, they've had to shut down again. And the problem now is, I think these business owners are exhausted, but they've also run through a lot of their cash reserves, and it's just getting harder. I also talked to the owner of a bus company, and most of his business has gone away. He does...
How did small businesses rebound earlier in the pandemic compared with larger firms?
school bus trips, military bus trips, commercial charters, and all of it is down if it's there. He's recently won a handful of contracts, but the margins are so thin because there's so much competition for the contracts that are there that he's really not making much of any money in their
What new businesses and industries have seen growth or hiring during the pandemic?
And he's had to decide to set aside some funds in case he has to file for bankruptcy. He's determined he wants to be the last business standing, but it's very hard.
This new aid package comes five months after the government's initial Paycheck Protection Program closed. That's a long time for businesses with expenses to have to wait.
Yes, it is.
How are specific examples (moving services, biotech staffing, construction, home and garden) adapting and thriving?
And businesses have pretty much run through the money they got from the Paycheck Protection Program. Some of them got disaster loans, but it's getting harder and harder. And I think small businesses are very optimistic by nature, small business owners, and they really want to make it through, but it's tough. And this second rise in cases has just been another blow for them.
And for a lot of businesses, things are not getting any better. The Census Bureau says about 40% of small businesses reported revenue declines in the second week of December, and 20% have had to cut workers' hours. What are some of those sectors that have taken the biggest hit?
Among the areas that have taken the biggest hits include performing arts companies, travel agents, bus operators. There are a bunch of them. We think a lot about restaurants, but the pain is really widespread in a lot of sectors that you may not think about as much. Also, businesses that are involved in the movie business. You know, if you operate a movie theater, it's been very, very difficult.
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Chapters
7 chapters
1
What federal relief package and forgivable loans are introduced for small businesses?
0:05–0:24
2
How have rising COVID-19 cases forced small businesses to cut back or shut down again?
0:24–1:20
3
Why are many small-business owners exhausted and running out of cash before new aid arrives?
1:20–2:11
4
Which industries and sectors have suffered the biggest revenue and employment declines?
2:11–2:46
5
How did small businesses rebound earlier in the pandemic compared with larger firms?
2:46–3:09
6
What new businesses and industries have seen growth or hiring during the pandemic?
3:09–3:31
7
How are specific examples (moving services, biotech staffing, construction, home and garden) adapting and thriving?
3:31–7:57
Speakers
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