A recent poll of business owners shows that 32% of small businesses only have one month or less of cash reserves. Also significant is that 47% of minority-owned businesses are cash strapped.
Small-business networking site Alignable has released its February State of Small Business Report, which shows that small businesses are facing a significant cash crunch, even though 75% of the new Paycheck Protection Program funding is still available.
Not surprisingly, 51% are earning half or less of pre-coronavirus revenues, with retailers, restaurants/bars, gyms, entertainers and designers struggling due to ongoing pandemic challenges.
Of the businesses surveyed, over 40% don’t expect to fully reopen until at least July. Over 5% feel they will never fully open again, and a small percent feel they’ll be forced to close by March.
So why aren’t some businesses applying for forgivable loans through the federal Paycheck Protection Program? Some say confusion and a hard time figuring out the application early on in the pandemic created a very discouraging process. However, the Michigan Economic Development Corp. has worked with the Small Business Development Center, the executive office and the state Department of Labor and Economic Opportunity to help businesses owners navigate the issues they are facing during this unprecedented time. The processes have improved, and more information is available.
With vaccines slowly being distributed, business owners surveyed are appearing as though they see a light at the end of the tunnel. But the biggest fear is making it through the pandemic without losing their business.
The Small Business Association has information on PPP loan forgiveness here.
The following are some resources for small businesses in Michigan, provided by the MEDC.
For PPP loans, visit sba.gov/article/2021/jan/08/sba-treasury-announce-ppp-re-opening-issue-new-guidance.
For personal protective equipment help, visit michiganbusiness.org/services/pure-michigan-business-connect/ppe/.