Ac­cord­ing to reports, sev­eral small busi­nesses have shut down while they waited for coro­n­avirus relief money to ar­rive.

Only 9% of com­pa­nies sur­veyed re­ceived gov­ern­ment aid

Orlando Sentinel - - Front Page - By Joyce M. Rosen­berg

NEW YORK — While thou­sands of small busi­nesses waited for coro­n­avirus relief money to ar­rive, they were shut­ting down and lay­ing off work­ers.

Two reports is­sued this week shed light on the cri­sis that busi­ness own­ers have been strug­gling through since the coro­n­avirus hit. On Wed­nes­day, pay­roll provider ADP said its small-busi­ness cus­tomers slashed more than 11 mil­lion jobs in April as they were forced to close or suf­fered steep rev­enue losses amid the virus out­break.

And nearly 30% of busi­nesses ques­tioned for a U.S. Cham­ber of Com­merceMetLi­fe re­port said they had closed dur­ing April, a statis­tic that helps ex­plain the big drop in pay­rolls last month. The sur­vey was taken from April 21-27 and ques­tioned 500 com­pa­nies.

Nearly a third of the busi­nesses sur­veyed said they ap­plied or tried to ap­ply for loans un­der the gov­ern­ment’s Pay­check Pro­tec­tion Pro­gram, and just 9% had re­ceived loan money. Only 48% said they were com­fort­able with their cash flow — a crit­i­cal fac­tor in busi­nesses be­ing able to op­er­ate. That was down from 80% be­fore the virus hit.

The sur­vey was taken largely dur­ing the pe­riod when loan ap­provals were on hold be­cause the first $349 bil­lion round of fund­ing had been ex­hausted April 16. Thou­sands of ap­pli­ca­tions sat at banks while Congress de­bated and even­tu­ally ap­proved a $310 bil­lion ex­ten­sion, and ap­provals re­sumed April 27.

As of late Tues­day, the Small Busi­ness Ad­min­is­tra­tion had ap­proved nearly 2.4 mil­lion loans to­tal­ing $181 bil­lion in the sec­ond round of fund­ing. In the first round, it ap­proved 1.7 mil­lion loans. The higher num­ber of loans in­di­cates that smaller loans be­ing sought by smaller com­pa­nies are be­ing ap­proved.

The num­bers from both the ADP and Cham­ber/MetLife reports re­flect the so­cial dis­tanc­ing re­stric­tions state and lo­cal gov­ern­ments be­gan im­ple­ment­ing in mid to late March, which forced the clo­sure of many small busi­nesses in­clud­ing stores, restau­rants, gyms and sports and en­ter­tain­ment venues. But of­fi­cials in many ar­eas have be­gun re­lax­ing those re­stric­tions, which may lead to a re­ver­sal of some of the job losses.

How­ever, even com­pa­nies that re­mained open have been los­ing busi­ness as cus­tomers stayed home or cut back their spend­ing. While com­pa­nies that cater to con­sumers have been hard hit, busi­nesses that serve other busi­nesses also have seen their rev­enue drop.

The ADP re­port counts jobs lost at the pay­roll provider’s busi­ness cus­tomers with un­der 500 work­ers. The small­est com­pa­nies, those with fewer than 20 work­ers, cut nearly 3.4 mil­lion jobs and those with 20 to 49 em­ploy­ees cut 2.6 mil­lion.

The La­bor Depart­ment has re­ported that more than 30 mil­lion peo­ple have sought un­em­ploy­ment ben­e­fits since the virus hit.

April’s losses re­ported by ADP sur­passed the 170,000 jobs cut in March. By com­par­i­son, com­pa­nies added more than 31,000 jobs on av­er­age each month dur­ing 2019.

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