Coronavirus Pandemic Becomes Christmas for Small Businesses in The United States
The data published by the United Nations Conference on Trade and Development (UNCTAD) in March showed that COVID-19 outbreak may decrease of $50 billion in exports across global value chains. Manufacturing Purchasing Manager's Index (PMI) in China decreased by approximately 22 points to 37.5 In February 2020, which is noted the lowest since 2004. When we consider the United States, the nation always plays major role in the global trade activities
The U.S. is known as a global leader in the commercial services as it has major IT companies such as Microsoft, IBM Oracle and many, in its regions. Plus, in country’s regions, there are major global players such as Ford Motor Co., Boeing Co., and Walmart operating in sectors like Automobile, Aerospace, and Walmart Inc.
According to the National Association of Manufacturers (NAM), first quarter of 2019, the manufacturing sector accounted for 11.3% of real GDP. In this quarter, manufacturers in the U.S. produced approximately $2.4 trillion worth of products for the economy. As per the U.S. Bureau of Economic Analysis, real GDP rose at an annual rate of 2.1% in the fourth quarter of same year.
The United States has maximum number of patients suffering from COVID-19 and maximum efforts and finances are engaged in healthcare sectors to save people’s lives. Plus, because of the rules related to social distancing to avoid spread of the virus, manufacturers are not able to achieve decided targets of production. Ultimately this scenario is creating stress for the manufacturers regarding production as well as supply chain activities.
The nation has 30 million small businesses that employ nearly half of its workforce. The latest research by industry analysts found that more than 80% of small businessmen are feeling extremely concerned about the ongoing business environment caused by the outbreak.
Thryv Inc. and America’s Small Business Development Centers (SBDC), a resource partner of the Small Business Administration (SBA), jointly conducted a study on small businesses between April 3 and 5, and was a follow-up to Waves 1 and 2 of the study conducted the prior weeks.
This week-over-week study uncovered an increasing shift in those businesses applying for an SBA Economic Injury Disaster Loan. Forty-four percent of businesses (up from 33 percent in Wave 1) are now indicating that they will apply and 25 percent of businesses (up from 5 percent in Wave 2) say they have already applied. These numbers are indicating that these businesses are at risk and they need support and schemes to survive through this crisis.
“SBDCs are here to help local business owners deal with these difficult times. We can provide business insight as well as explain the loan process,” states Charles “Tee” Rowe, president and CEO at America’s SBDC. “With 44 percent of SMBs interested in applying, we have resources they can count on to help them.”
Also, to support these small businesses many big companies are offering help via various mediums. For instance, Facebook has launched a Small Business Grant Program for the small businesses disrupted by COVID-19 crisis and going through financial tensions. Through this program, Facebook is offering USD 100M in cash grants and ad credits to help these businesses during this challenging time.
In a Small Business Relief Update Meeting scheduled on April 7, 2020, the president Donald Trump addressed the American small businesses. He stated, “On Friday we launched the Paycheck Protection Program to help small businesses keep workers on the payroll. As of today, SBA has processed over $70 billion in guaranteed loans, which is far greater than we would have ever thought at this time, I think, Steve. I don’t think we ever had any number like that in mind. That will provide much-needed relief for the more than a quarter of a million businesses that have applied for these loans. And these numbers will continue to rise quickly. Again, far greater than anything we could have expected.”
Later, on April 24, 2020, Trump signed $484 billion coronavirus relief bill to boost American small businesses, workers and healthcare providers. The legislation provides $320 billion in additional funding for the Paycheck Protection Program (PPP) and appropriates $60 billion more for the Small Business Administration’s (SBA) Disaster Loan Program.
As we see, the small businesses are receiving reliefs and financial support from the various sources including government funds, private equity firms, or major companies. So, it has become need for these businessmen to just take advantages of these helps and try to survive the pandemic.
This is the Part II of our three-part series on small businesses befitting from the COVID-19 as they get support in their own countries to flourish. The second part covers the United States. To know about the situations of small businesses in Asia-Pacific, read Part I, and for Europe, read Part III.
Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.