Several large companies have survived the coronavirus but small, independent businesses were hard hit as the economy struggled to adapt.
Loans For Segments
When the White House launched the Coronavirus Aid, Relief and Economic Security program, many business owners found relief as they were given a chance to revive operations. However, not all small businesses were helped and some were shut off from loans.
Most people are unaware of the importance of small and microbusinesses in the economy of local communities, Midwest Bank Center chairperson and chief executive Orv Kimbrough said in Fortune Magazine.
Kimbrough said most businesses affected by economic crises such as COVID-19 were owned by African Americans. Between February and April, 41% of African American owned businesses closed down compared with 17% among others.
Kimbrough said Federal Reserve data found 53.4% of African American-owned businesses that applied for bank loans were turned down.
Closure Without COVID-19 Relief
Business owners in the U.S. have been waiting for a second COVID-19 stimulus package that might help small businesses such as restaurants with financial relief.
The International Franchise Association estimated that up to one in 20 small businesses in the country was faced with potential closure without the second stimulus package.
As of the end of August, 32,700 franchised businesses in the U.S. have already shut, the association said. As many as 1.4 million jobs were lost owing to these closures.
Among those that were shut included hotels, day care centers, gyms, spas, hair salons and some popular restaurants.
Stalled Stimulus Talks Shut Down 12-Year-Old Small Business In Arizona
In Arizona, Pizza Man's Pavilion owner Michael Jensen said he was "getting ready to close down" after his hopes for a second COVID-19 package fell apart when talks stalled this week.
Like many small-business owners in the country, Jensen, who has been building food trailers for restaurants, was hoping the second stimulus would help his 12-year-old business.
Jensen said that since January there had been pizza trailers that were not retrieved as restaurant owners couldn't afford them anymore. "I'm sitting here with zero income, using my reserves and I'm out," he said.
While some operations still have cash left to survive until the presidential election Nov. 3, Jensen said many would be closed by then.
President and chief executive of the Arizona Chamber of Commerce, Glenn Hamer, said it was "very important" for small-business owners to receive additional stimulus.
Small Tourism Waiting For October To Pass
While some businesses have shut down owing to the economic effects of the virus, others continue to stretch what they have left as they hope for better this month.
October is the busiest month of the year as people prepare for the holidays and the tourism industry is usually in high spirits.
COVID-19 restrictions have held back the tourism industry and many smaller operations in different states but some small businesses believe that patience will keep them grounded.
Owner of Flambeaux Bicycle Tours in New Orleans, Eric Gabourel, said his ultimate goal was "to make enough to pay the rent and the utilities on this store front."
Data: Small Services Suffer In Cities With Tech Dominance
In cities such as San Francisco and Austin - home to many technology companies - small businesses such as restaurants and other services were hard hit, data from Harvard University's Opportunity Insights revealed.
The data found that small businesses in states and cities with a large technology sector had been particularly hurt by the switch to telecommuting.
Restaurants and service businesses didn't expect the quick switch by big technology companies to remote working - giving them little space to adapt to home deliveries and take out.
The data found small businesses in the tourism and leisure sectors of the Bay Area and New Orleans saw widespread closures as 37% reported no transactions during the pandemic.
