About nine million small businesses could shutter by the end of the year due to the coronavirus pandemic unless the government steps in with additional assistance, according to a survey conducted by the Federal Reserve Bank.
The poll found the about 3 in 10 small businesses don’t think they’ll survive the year without help. CBS Moneywatch notes that there are about 30 million small businesses in the country, meaning that this proportion amounts to about nine million small businesses.
Minority-owned businesses were more likely to report a poor financial outlook, with 8 in 10 saying they need additional relief.
Sam Myers and James Dillard, the owners of a Minnesota moving company, noted that they “were at the brink of caving in and going out to find full-time jobs” after the pandemic began, and even though they started to get more work in June, "three months is a long time to go without income, and the bills kept coming in."
The survey found that the number of small businesses that have over $100,000 in debt increased to 44% last year, up from 13% the year before, and that "Small business debt mounted and business owners plowed their personal savings into their firms to keep them afloat," according to the Fed researchers.
Myers also noted to CBS that while her company applied to the Paycheck Protection Program, they received far less than what they requested.
"We applied again for a loan and only got approved for $2,900," she noted. "I'm not sure what math they're using but it seems so unfair that these huge companies are getting the funds they need and we were not even able to get anything significant."
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