Closures, layoffs, depressed revenue and uncertainty. Foto: YouTube
By Isaac Cohen*
The Federal Reserve Bank of New York released the results of the “Small Business Credit Survey” for 2020, based on the responses of 9,693 United States firms, that have between one and 499 employees and that were still operating six months into the pandemic. The conclusion is that small businesses were besieged by “closures, layoffs, depressed revenue and uncertainty,” together with mounting indebtedness. https://www.fedsmallbusiness.org/survey/2021/report-on-employer-firms
Starting by sales, 88 percent of these firms had not returned to pre-pandemic levels, while 39 percent said they cannot survive without government assistance if sales did not return to normal. However, minority owned firms are subject to worst conditions. According to the survey, 57 percent of all firms described their financial condition as “fair” or “poor,” with this figure increasing to 79 percent for Asian-owned firms, 77% for Black-owned firms, and 66% for Hispanic-owned firms.
The main challenges identified by those surveyed for this year are weak demand, for 37 percent; government mandated closures or restrictions, for 53 percent; and supply chain disruptions, for 37 percent. Additionally, 80 percent of firms were challenged financially in 2020, with 62 percent recurring to personal funds and 55 percent cutting staff hours and downsizing operations.
The results of the survey should be sent to those members of Congress who are still debating if the relief package of $1.9 trillion, proposed by the White House, deserves bipartisan support.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.