Time to Assist Micro- and Nonemployer Businesses
[This blog is based upon findings from research into small business related COVID-19 assistance. For the full report presenting the findings based upon that research, visit this link.]
The economic impact of Covid-19 has been devastating for most American businesses. It has been especially so for small businesses.
This is an existential problem because small businesses are the heart and soul of the American economy. If many of them disappear due to the coronavirus, it will greatly diminish this nation’s strength and spirit.
That’s not just our opinion. It is the opinion of more than 100 CEO’S of large companies, major trade associations and small businesses who sent a letter to congressional leaders advocating a major intervention on behalf of small businesses.
Small Business by the Numbers
The 2020 Small Business Profile prepared by Small Business Administration Office of Advocacy reports that in 2017 there were 31.7 million small businesses in the U.S. Nearly 6 million of those businesses had employees. 25.7 million were nonemployer firms.
For the employer firms, over 5.3 million had 1–19 employees and nearly 640 thousand had 20–499 employees. These businesses employed nearly 60.6 million people — 47.1% of the private sector workforce — and generated 1.6 million net new jobs. Firms with less than 20 employees added 1.1 million of those jobs.
Those numbers attest to the central importance of small business for this country and its economic future. The coronavirus pandemic is putting that future at risk.
The extent and nature of that risk was documented in various small business studies and reports in the initial months of the pandemic which showed:
- 43 percent of small businesses across a range of sectors closed temporarily
- The number of active business owners declined by 3.3 million between February to April
- Nearly 7.5 million small businesses may be at risk of closing permanently
The bottom line is that the impact of Covid-19 on small businesses has been and will be staggering. Millions of active small businesses have closed temporarily.