Hope, Worry, Frustration: Small Businesses Mixed On Their Outlook For The Future

Credibly
·3 min read

The National Federation of Independent Business’s (NFIB) monthly survey of small business optimism has been on a rollercoaster throughout the depths of the pandemic. The Small Business Optimism Index, which surveys small business owners about their plans for hiring and expansion as well as their anticipated revenue growth, has fluctuated between extremes as business faced shutdown, then reopening, then cautious planning for an uncertain future.

For instance, back in May, the NFIB predicted that as many as 50% of small businesses in California could close by summer. The May report also found that just 3% of all respondents felt comfortable with plans to expand their business.

However, things have changed in the intervening months. Businesses have begun to reopen, hiring has picked up and owners have found some degree of stability thanks to loans made as part of the government’s Paycheck Protection Program executed in partnership with banks and fintech lenders like Credibly.

Hope For The Future

In contrast, the NFIB’s June report found some room for optimism among small business owners. While earnings trends remain at their lowest level in a decade of the survey, an increasing number of business owners are thinking about expanding or otherwise investing in their operations with 13% of respondents indicating such.

This upswing in planned expansions has coincided with a greater number of states and communities lifting lockdown restrictions. The hope is also echoed in business owners’ anticipated sales volume, hiring initiatives and inventory investments, each of which saw a double-digit percentage upswing in the survey.

Nevertheless, the economic reality many businesses are facing threatens these brief glimmers of hope. A recent press release from the NFIB highlighted that 46% of business owners surveyed anticipate needing additional financial support through the next 6 months, including many that have received and utilized their PPP loans.

The Uncertain Present

Now, with the PPP program ended, the Small Business Administration (SBA) has begun issuing and clarifying early guidance on PPP loan forgiveness. Meanwhile, Congress continues to wrestle with itself on how to pass further legislation aimed at easing the financial burden caused by the pandemic.

In the midst of all of this, small business owners are desperate for concrete guidance from the government to pilot them through the coming months of uncertainty. Without it, many businesses have simply been forced to adapt to the current circumstances and associated costs. In other words, doing more with less.

In a recent small business survey conducted by CNBC and SurveyMonkey, nearly 70% of businesses owners who took part say that they expect the impact of the pandemic will irrevocably change how they operate, with nearly 50% of those indicating those costs have eaten into their already diminished operating capital.

Desperate For What Comes Next

While the hope is growing that the worst of the pandemic is behind them, small business owners and their advocacy groups remain starved for a greater sense of stability and guidance from the government. For now, owners have to rely on their best instincts as well as the latest information from public health organizations to guide their way through the ongoing pandemic.

Barring further relief efforts and further information from the SBA, business owners should keep lines of communication open with their lending source for insight into how to best apply for PPP loan forgiveness — if they applied to the program — or what other steps they might be able to take in order to best weather the current uncertainty to reach the brighter future many of them hope to see soon.

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