The National Federation of Independent Business (NFIB) has released its latest COVID-19-related survey assessing the health crisis’ impact on small businesses. It reports that about one-in-five (21 percent) small businesses say they will have to close their doors if economic conditions don’t improve in the next six months.

Congress is currently negotiating additional financial support for small businesses after the initial Paycheck Protection Program (PPP) loan period expired on August 8. If eligible, 44 percent of small businesses surveyed said they would apply or re-apply for a second PPP loan with another 31 percent saying they would consider applying for one. Almost half of PPP loan borrowers (47 percent) anticipate needing additional financial support over the next 12 months.

“The health crisis is not impacting small businesses equally,” says Holly Wade, NFIB director of research and policy analysis. “Small businesses are adapting to the abrupt shifts in consumer spending, managing customer and employees’ health and safety, and complying with state and local mandates, which are all creating additional stress for small-business owners. Many of them still need more financial assistance just to keep their doors open and staff on payroll.”

The survey found that 84 percent of PPP borrowers have now used their entire loan, up from 71 percent in July. NFIB says that the remaining 16 percent of borrowers are likely not far behind on spending. Most PPP borrowers (81 percent) applied for the loan through the financial institution that they normally use for business purposes, and about 43 percent of borrowers plan to use the EZ form when applying for loan forgiveness.

It also notes that 35 percent of respondents have applied for an Economic Injury Disaster Loan (EIDL). Nearly three-quarters (74 percent) were approved for a loan and nine percent were denied; about 18 percent still have not heard yet about the status of their loan application. Of those who applied for an EIDL loan, 22 percent of loan applicants are “very satisfied” with the EIDL program overall and another 44 percent were “satisfied.”

Sales levels remain at 50 percent or less than they were pre-COVID for about one-in-five employers. Another 28 percent report sales levels of 50-74 percent from pre-crisis levels. Half (50%) are nearly back to where they were with some (14%) exceeding pre-COVID sales levels.

While 21 percent of small-business owners report they will have to close their doors if current economic conditions do not improve over the next six months, another 19 percent anticipate being able to operate no more than seven to 12 months under current economic conditions. However, over half (61 percent) are better situated and do not anticipate any near-term problems.

Most small-business owners do not expect business conditions to improve to normal levels until next year at the earliest, while 19 percent anticipate conditions improving to normal levels by the end of the year and six percent of owners say that conditions are back to normal now. Over half of owners (52 percent) anticipate it taking until sometime in 2021 and 20 percent believe sometime in 2022.

The CARES Act provision of supplemental unemployment insurance benefits through July 31 presented a significant challenge to some small-business owners. About one-third (32 percent) of small-business owners reported that the extra $600 per week has hurt their business by making it harder to hire or re-hire workers. However, the UI program has also helped support customer spending, with nine percent of owners feeling like they benefited from the program by putting more money in their customers’ pockets. Three percent of owners said they had to offer a higher wage to encourage a worker to come back to their job, and four percent reported having an employee agree to continue working but only with reduced hours in order to also receive the $600 per week benefit.

This publication marks NFIB’s 11th Small Business COVID-19 survey assessing the health crisis impact on small business operations, economic conditions, and utilization of the targeted small business loan programs. The first series was published in early March 2020 with subsequent publications every two to three weeks, found here. The full survey is available here.