To estimate the likelihood that these companies would be vulnerable to closing as a result, we drew from an April 2020 survey of small-business owners published by the National Bureau of Economic Research. To understand how much the effects of COVID-19 would probably affect small companies, we relied on data from the US Census Bureau’s Small Business Pulse Survey. Instead, we aimed to establish a baseline for understanding the magnitude of the challenge small businesses face.
Our analysis cannot project the impact of the significant federal, state, local, and private interventions, ranging from public–private partnerships to rent deferrals or forgiveness. We relied on surveys of small-business owners to help us understand what they have been experiencing and how likely they are, in their own estimation, to close permanently as a result. 3Īs we discuss further in the sidebar on methodology, this does not take into account support and interventions already undertaken, through the Paycheck Protection Program, for example.īroad, economy-wide data about the COVID-19 pandemic’s effects on business are still emerging.
Our analysis of several surveys of small businesses suggests that before accounting for intervention, 1.4 million to 2.1 million of them (25 to 36 percent) could close permanently as a result of the disruption from just the first four months of the COVID-19 pandemic. State of Small Business Report, Facebook & Small Business Roundtable, May 2020, .Īnd by mid-May more than half had laid off or furloughed employees. It excludes “nonemployer firms” (self-employed people) except where noted otherwise.īy mid-April, according to a report from the Facebook & Small Business Roundtable, about a third had temporarily stopped operating, 2 This article focuses on small businesses with at least one but fewer than 500 employees. As the fallout from the coronavirus pandemic comes into sharper focus, the position of the nation’s small businesses appears, overall, to be particularly bleak.
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