- Small businesses increasingly fear that they will have to close as the COVID-19 pandemic continues and initial relief funds run out
- Initial round of closures hit businesses that were already struggling, while those currently facing hardships have endured months of lagging revenues and are less optimistic that recovery will arrive in the near future
- Wave of small business shutdowns could lead to further consolidation by larger corporations
As the COVID-19 pandemic drags on and many companies continue to be burdened by restrictions and diminished revenues, economists fear that an enormous number of small businesses may collapse before the end of the year if they do not receive further relief. Their projections warn that the rapid-fire shuttering of so many companies would hamper economic recovery in the United States while also providing an opportunity for larger corporations to take a dominant role in the market.
The initial wave of small business shutdowns mostly affected places that were already struggling before the impact of the pandemic. Millions of businesses were buoyed by funds from the Paycheck Protection Program, which helped companies cover expenses during revenue shortfalls. However, many of these businesses are again facing dire circumstances as relief funds have been used up and reduced revenues continue.
Other potential hardships businesses will face during the fall include cooler weather making it unfeasible for restaurants to host outdoor dining in many parts of the country, a potential resurgence of the virus, and less robust consumer spending due to the expiration of enhanced unemployment benefits. Some companies may also opt to cut their losses rather than slog through the winter and hope for a revival in business in the spring.
Some small business owners have indicated that they are depending on a second round of relief to stay afloat. While both House Democrats and Senate Republicans proposed relief measures, Congress adjourned in August after failing to pass further assistance. Congress has resumed efforts to pass a bill, with Republicans proposing “slimmed down” legislation, but partisan impasse is likely to continue.