The coronavirus pandemic has had a drastic effect on all walks of life. Whether we talk about the lives that have succumbed to this disease or the financial loss the people had to suffer, the pandemic is changing everything around us. And one of the worst hit countries by this pandemic is the United States. Not only has the country recorded the highest number of cases and deaths since coronavirus broke out, people from all classes in the social ladder have been fighting to cope with the economic slowdown that it has brought. With Exhausted Pandemic Funds, United States’ Small Businesses Face Mass Closure.
Olivia Colt, the owner of Salt & Honey Catering Plus Events in Oakland, California, New York, has suffered major losses since the pandemic. She had survived two strokes by the age of 27 and after ten years of working hard and surving yet another stroke was she able to stabilize her business. The pandemic caused cancellations of wedding, functions, and all gatherings. With no orders or events lined up, she had to cut down her staff to just six members from 25 and even secured $100,000 forgivable loan under the U.S. Paycheck Protection Program (PPP) and another $150,000 loan under a federal program to pivot her business. She started selling groceries online and was expecting to survive the pandemic with the funds she had secured. However the pandemic wasn’t intending to let that happen. And she believes that she might have to shut her business down altogether if the pandemic drags on.
And Olivia Colt is not the only person facing such hardships. There are hundreds of small businesses across the country that are on the verge of a breakdown amidst one of the worst hit economic slowdown. Most of the businesses were barely surviving on the funds provided by the government and the debts. But as there seems to be no light at the end of the tunnel, most businesses are fearing a complete closure in the coming times.
The funds most businesses secured from the $600 billion Paycheck Protection Program are fast draining out and there seems to be no other funding scheme in the pipeline by the government.
According to the National Federation of Independent Business, a leading trade group for small U.S. firms, around 23% business are expected to be out of business within the next six months unless the economic conditions improve of the government offers some other relief fund.
And the fears of the small businesses don’t end there. They might manage to take some debts and secure loans to keep their business running. But the question is, will they be able to pay back. Who knows when the economy with take pace once again. With no sign of the coronavirus vaccine, it feels things will stay the same for an indefinite period.
With ingestion infections rising the restrictions are becoming stricter. People are being prohibited from going out and that’s posing an even bigger problem for the small businesses. They feel that instead of draining the funds in trying to keep the business running, it’s better to shut it down for the better.
According to Ari Takata-Vasquez, manager of Oakland Indy Alliance, a group of about 500 small firms in Northern California, “Three weeks ago I noticed a shift in energy. A lot more people seem to have closure on the table.”
Only 44% of the businesses have the funds to survive the next three months. The Oakland Organization has even initiated a fundraiser this week to raise $4 million from donors to finance grants to local firms. They’ll be lending the money collected to local businesses in Oakland, especially the ones that are owned and managed by immigrants. With Exhausted Pandemic Funds, United States’ Small Businesses Face Mass Closure.