CHARLOTTE, N.C., May 28, 2020 /PRNewswire/ -- Even as states
and cities slowly allow more businesses to reopen, many
entrepreneurs are anxious about doing so. Nearly half of small
business owners worry they cannot afford to resume normal
operations following mandated closures to slow the spread of
COVID-19, according to LendingTree's latest survey of small
business owners. Approximately 46% of small business owners cite
funding as the primary obstacle to reopening, and that once open,
increased health and safety measures could further stifle
sales.
Full report:
https://www.lendingtree.com/business/survey-businesses-worried-not-enough-money-to-reopen/
Key findings:
- Almost 6 in 10 small business owners will reopen as soon
as they're allowed. However, 15% said they'll wait a little longer
to open and another 26% aren't sure when they'll ever reopen.
- Fewer customers and fewer sales are expected by 46% of small
business owners upon reopening.
-
- Just 17% think they'll get the same number of customers
spending the same amount as they did prior to the coronavirus
pandemic.
- Not having the funds needed to reopen is the primary reason
small business owners would not reopen once stay-at-home orders are
lifted. They wonder if profits would warrant reopening as they
also worry about the safety of themselves and employees who may not
want to return.
- About 63% of small business owners surveyed have applied for
funding through the Paycheck Protection Program.
-
- Of those who applied for a PPP loan, 44% have received funding.
This is a significant jump from our April survey, where we found
just 5% of those who applied were approved.
- However, more than half of business owners who received PPP
funding are nervous they won't meet forgiveness criteria. Some
are more worried than others: 24% are "very concerned," while 29%
are "a little" concerned.
Small business owners have reservations about
reopening
Although most small business owners are eager to
reopen once their cities and states fully lift restrictions, some
entrepreneurs worry about the lingering effects of the pandemic.
Just 11% of respondents said they have no anxiety about
reopening.
The biggest concern for 39% of small business owners is that
they will not generate enough sales to make opening worthwhile. And
30% are nervous they would have to shut down again if there is
another spike in coronavirus infections. A smaller group is worried
about complying with ongoing social distancing and health safety
guidelines, as 8% said that was their main concern, while 5% are
most troubled about employees not wanting to return to work.
Fortunately, 52% of survey respondents expect all of their
employees to return to work when the business reopens. Nearly half
— 48% — plan to bring back the same number of people at the same
number of hours. And only 23% of business owners expect to employ
fewer people for fewer hours when they reopen.
Despite promising PPP loan approvals, financial concerns
remain
Among our survey respondents, 26% applied for a PPP loan from
the U.S. Small Business Administration in the first round and 18%
applied in the second round. The SBA opened applications on
April 3rd, but funds ran out on
April 16. Congress replenished the
loan program which resumed April 27.
Another 19% applied in both rounds. Of the 44% of business owners
who were approved in either round, 3% returned their entire PPP
loan. More than half of business owners are not confident they will
meet the criteria for PPP loan forgiveness.
The SBA released its PPP loan forgiveness application after
weeks of confusion around the forgiveness process. Borrowers must
spend at least 75% of PPP loan funds on payroll expenses and no
more than 25% on mortgage interest, rent payments and utilities to
qualify for forgiveness, spending those funds within eight weeks of
receiving their loan. However, Congress could pass legislation that
would extend that eight-week period, as well as upend the 75%
rule.
Reopening Plans
For those moving full steam ahead, 54% of business owners plan
to inform customers of their reopening through email. To encourage
business, 43% of respondents are going to offer special promotions
or sales. About 31% plan to use paid social media ads to promote
their business in the first month after reopening, while 35% expect
to take advantage of unpaid organic social media content.
Approximately 9% of business owners don't have any plans to promote
their business after reopening.
For more information about the survey and its findings,
please visit:
https://www.lendingtree.com/business/survey-businesses-worried-not-enough-money-to-reopen/
Methodology
LendingTree conducted an online survey of
1,260 small business owners who had previously applied for funding
through LendingTree's small business lending database. Of the total
respondents, 757 business owners had applied for a PPP loan.
Participants were emailed a link to participate in the survey,
which was fielded using Qualtrics from April
16-19, 2020.
About LendingTree
LendingTree (NASDAQ:
TREE) is the nation's leading online marketplace that connects
consumers with the choices they need to be confident in their
financial decisions. LendingTree empowers consumers to shop for
financial services the same way they would shop for airline tickets
or hotel stays, comparing multiple offers from a nationwide network
of over 500 partners in one simple search, and can choose the
option that best fits their financial needs. Services include
mortgage loans, refinances, auto loans, personal loans, business
loans, student refinances, credit cards and more. Through the My
LendingTree platform, consumers receive free credit scores, credit
monitoring, customized recommendations to improve credit health,
and notification when there are opportunities to save money. In
short, LendingTree's purpose is to help simplify financial
decisions for life's meaningful moments through choice, education
and support. LendingTree, LLC is a subsidiary of LendingTree, Inc.
For more information, go to www.lendingtree.com, dial 800-555-TREE,
like our Facebook page and/or follow us on Twitter
@LendingTree.
Media Contact:
Megan
Greuling
Megan@LendingTreeNews.com
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SOURCE LendingTree.com