Daily Management Review

Survey Revealed Longer COVID-19 Impact On The U.S. Small Business Sector


Despite the uncertainty, the small and medium sized U.S. corporate sector seem to show “surprising resiliency”.

Veem is a “global payments network” based out of San Francisco. It has conducted a survey wherein 81% of the small companies in the U.S. are expecting their business to face the effects of COVID-19 in the coming twelve to sixteen months, while almost 90% of them are preparing for “an economic slowdown”.
Veem has helped “thousands of small companies with loan applications under the “Paycheck Protection Program”, in short PPP, which marks the “$660 billion emergency” programmed initiated by the federal government. While Veem sees the small corporate bodies quickly replacing themselves to be at par with the changing corporate climate. Furthermore, Reuters mentioned:
“Of the 690 firms surveyed, 65% said they had either submitted an application for the federal aid or planned to do so in the near future, Veem said in its first report on the sentiment among small to mid-sized businesses”.
As per last week on Friday, the SBA, namely the “Small Business Administration” had given its approval for over “2.5 million loans” which totalled to “$536 billion”. The largest world economy has received the brunt of the pandemic effect through “widespread shutdowns aimed at containing the spread of COVID-19”. In fact, last week’s U.S. government data revealed that last month the unemployment number saw an increment of “14.7%”, while the White House expects the possibility for the same to rise to twenty percent in the month of May.
Moreover, the Chief Executive Officer of Veem, Marwan Forzley informed that impact of the crisis were felt in a mixed manner by the small businesses. On one side of the spectrum there were companies that struggled survive whereas there were others that ripped benefit as they belong to the essential category while some others also turned to “working online”. In Forzley’s words:
“When you look at the data, there’s surprising resiliency with these small and mid-sized businesses. Despite all the uncertainty, they’re trying to make changes in their businesses, to ... either benefit from the situation or repurpose their business so that they’re not as badly impacted.”
Furthermore, the survey revealed that as much as seventy percent of the companies were somewhere uncertain about the “U.S. economy in 2020” while another fifty five percent informed significant impact on their revenue. However, thirty percent companies showed optimism whereby hinting that some were in better position to “thrive in the current environment”.
While, Reuters also added:
“More than half of the companies reported moderate to high supply-chain disruptions as a result of factory shutdowns, border restrictions and industry-wide furloughs, and more than one third said they were now setting up regional supply chains or rapidly pivoting their supply chain to make needed supplies”.
As much as close to twenty five percent companies were “investing in new technology” to turn to “information technology systems”. In fact, the survey also highlighted liquidity as one of the “key pain point” as there was operational cost reduction as well as a drop in loan application. There were also thirteen percent of the business who said they did not prepare for any economic slowdown.
Over fifty percent of the companies has stopped hiring while over twenty percent even cut down on staff strength while eighteen percent had plans of increasing “staff training and support”.