More than half of U.S. small businesses have either closed temporarily or expect to within the coming weeks due to impacts from the coronavirus, according to a recent survey.
An April 3 U.S. Chamber of Commerce survey shows one in four U.S. small businesses (24%) closed temporarily due to COVID-19 and the 40% that remain open expect to shut in the next two weeks.
Even more alarming, 43% of small businesses believe they have less than six months until shutting permanently, with 10% saying they have less than one month before closing permanently.
"The next couple months are going to be critical for figuring out how many small businesses will make it through this to the other side," said Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber.
Despite those grim statistics, some longer term optimism still exists, the survey found.
Much of the small business assistance is in the CARES Act Congress recently passed, Bradley said.
"These are the things that are most likely to help [small businesses] traverse this period," he said.
Small businesses prefer direct cash payments (57%) over Small Business Administration-backed loans, the survey found.
"Longer term, small businesses continue to be optimistic," the survey’s executive summary noted, citing 23% of respondents who said they expect to hire in the next year and 57% feeling positive about their overall business health.
Other findings include:
- Nearly one in three (29%) of small businesses want more guidance on how to keep their customers and employees safe, 26% on how to respond to the crisis, and 25% on understanding the outbreak.
- One in four believe the national economy is healthy and 32% believe their local economy is doing well. That's down from the previous quarter, where 60% said the national economy was in good shape and 52% said their local economy was healthy.
- More than half of small businesses (54%) rate the overall health of the U.S. economy as poor.
- Six in 10 (59%) feel comfortable with their current cash flow, compared to 80% in the first quarter.
- A little more than half of retailers (51%) believe they can stay in business for no more than six months without closing permanently.
- Almost half of small businesses (46%) believe it will take six to 12 months for the economy to recover.
Small businesses are responding to the virus in a variety of ways with 30% shortening hours and 17% adjusting employee pay or hours.
Businesses in the service industry are most likely to report shorter hours (34%) or temporarily close (32%).
More manufacturers have adjusted employee pay or hours (28%) than service, retail, and professional services (10% to 16%).
The survey also found that revenue expectations vary by region.
Small businesses in the South are the most optimistic, with 59% expecting a revenue increase next year, compared to 39% in the Northeast and 41% in the Midwest.
Revenue expectations also vary among industry.
More than half of small retailers (54%) and manufacturers (53%) anticipate increased revenues next year, while less than half of the service (48%) and professional service sectors (46%) expect it.