ESSEX COUNTY, NJ — Only one in 10 small businesses in New Jersey’s 11th Congressional District is currently turning a profit amid the coronavirus crisis, a recent survey says. And that’s not the only bad news.
According to Rep. Mikie Sherrill, statistics like this are part of the reason why the small business owners in her district need – and deserve – ongoing federal aid to survive the pandemic.
On Tuesday, Sherrill released results from a survey her office took earlier this month. More than 350 businesses in the district participated, including respondents from a “wide range of sectors” such as auto body repair shops, florists and dental offices.
“The results are a sobering reminder that many small businesses continue to face a difficult road ahead,” Sherrill said.
Local business owners’ complaints gravitated around a common theme – plummeting revenue and ongoing expenses.
“We are struggling to maintain expenses due to being closed for several months with zero income,” the owner of a childcare center in Nutley wrote. “In addition to this, our current revenue is approximately 1/20 of what our usual revenue is, due to very low enrollment.”
See related article: Steaks, Pretzels, Music: COVID Shutdown Ravages Nutley Businesses
A therapy provider in Wayne reported that it needs assistance to keep afloat over the long-term.
“We had very good short-term plans, but our limited capacity feels like it is going to be a reality for quite some time,” the business wrote.
The pandemic has been especially tough on new businesses that haven’t had a chance to dig a foothold in their local communities yet.
“We have reopened,” a carpet and flooring store in Montville wrote. “We just don’t know how much longer we can remain open.”
According to Sherrill’s office, other highlights from the survey included:
"Over 69% report current revenue levels below half of pre-pandemic levels, including an astonishing 44% below a quarter of their pre-pandemic revenue."
"A mere 9% of respondents are currently profitable, and 79% do not expect to be profitable six months from now."
"Employers of all sizes have reduced staff, and the percent of businesses operating with only one or two employees has increased from 35% to 50% over the course of the pandemic."
"The biggest challenges to reopening that business owners identified are a lack of consumer confidence and restrictions on capacity. Other areas of concern include safety expenses, staffing issues and the costs of adjusting operations."
‘YOU CAN’T MAKE UP FOR LOST REVENUES’
A recent round of funding from the Paycheck Protection Program (PPP) gave small businesses a much-needed boost, Sherrill said.
More than 4.9 million loans worth roughly $521 billion were approved for businesses and nonprofit organizations across the United States under the program, which was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The aid is meant to help small businesses keep workers on their payrolls during the COVID-19 crisis. Funds can also be used to pay interest on mortgages, rent, and utilities. PPP loans have an interest rate of one percent and can be fully forgiven under certain conditions. (Learn more about the program)
See related article: Coronavirus PPP Loans In NJ (Where The Money Went)
Sherrill said that similar federal programs designed for COVID-19 relief may be “underutilized.” According to the survey:
“While 72 percent of small businesses responding to the survey received funding from the PPP program, only 37 percent accessed advances provided by the Economic Injury Disaster Loan (EIDL) program and only 29 percent received a loan from the EIDL program suggesting that this program has been underutilized.”
Programs such as the PPP are a good start. But while more than 70 percent of the businesses that responded to the survey got loans through the PPP, the funds aren’t nearly enough to weather the ongoing crisis, Sherrill said.
An event marketing firm in Rockaway is one of the businesses trapped in that boat, the congresswoman pointed out.
“You cannot make up for lost revenues,” the business owner wrote in the survey. “The PPP held us over, but there are still too many unknowns with it. At some point, the mounting debt will be insurmountable and we will have to close.”
The 11th District includes the following municipalities:
Morris County - Boonton Town, Boonton Township, Butler, Chatham Borough, Chatham Township, Denville, East Hanover, Florham Park, Hanover, Harding, Jefferson, Kinnelon, Lincoln Park, Madison, Mendham Borough, Mendham Township, Montville, Morris Plains, Morris Township, Morristown Town, Mountain Lakes, Parsippany-Troy Hills, Pequannock, Randolph, Riverdale, Rockaway Borough, Rockaway Township and Victory Gardens
Essex County - Bloomfield (split with 10th), Caldwell, Cedar Grove, Essex Fells, Fairfield, Livingston, Montclair (split with 10th), North Caldwell, Nutley, Roseland, Verona, West Caldwell, West Orange (split with 10th)
Passaic County - Bloomingdale, Little Falls, North Haledon, Pompton Lakes, Totowa, Wanaque, Wayne and Woodland Park
Sussex County - Byram, Hopatcong, Ogdensburg, Sparta and Stanhope
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