April 2021 survey shows small businesses working toward pre-crisis levels, yet the recovery is fragile.
A new survey of small business owners published by the NFIB Research Center has found that businesses are at last returning to normal operations after the economic devastation brought on by the COVID-19 pandemic. This is in large part due to federal relief programs such as the Payment Protection Program (PPP) loans, which around three-quarters of respondents said they received.
“Many small businesses have taken advantage of the SBA programs devoted to helping small employers during the COVID-19 pandemic,” said Holly Wade, Executive Director of NFIB’s Research Center. “Now that many of those programs are wrapping up, small businesses are turning their attention back to their normal daily operations. It is crucial that Congress and the Administration don’t enact policies that will hurt the small business recovery.”
The survey was conducted the last week in April, 2021 and is the 17th in NFIB’s series of COVID-19 surveys that began in March 2020. Key findings from the survey include:
Employee Retention Tax Credit
- Unfortunately, awareness of the Employee Retention Tax Credit (ERTC), which offers substantial tax relief on wages, continues to lag. More than half (52%) of owners said they were not familiar with the ERTC, and only 2% have taken advantage of the ERTC on 2021 wages.
- To learn more about the ERTC, go to NFIB.com/ERTC.
Paycheck Protection Program
- Among small business owners who have not yet applied for a first PPP loan, 7% are still planning to apply.
- Seventy-three percent of respondents said they took a first-draw PPP loan in 2020. Of them, about four-fifths (82%) said they have already submitted applications for loan forgiveness.
A significant fraction of owners applied for second-draw PPP loans this year: 37% of those who received first-draw loans and 15% of owners who had not received a first-draw loan.
Just over half of small employers reported having had an employee take COVID-19 related sick leave or family leave. Seventy percent of those owners offered paid leave, and 43% of that group took advantage of the FFCRA tax credit.
- Fourteen percent of owners report that profits remain at half or less of pre-pandemic levels. Comparatively, 59% say that profits are near, at, or above pre-pandemic levels.
- 15% say that conditions are back to normal, while 37% expect a return to normalcy later this year. A similar number (36%) say it will happen in 2022, and the remainder (12%) don’t expect conditions to fully improve until after 2022.
- Owners who report they will need to close if economic conditions don’t improve in the next six months remains similar to the March survey: 12% in the latest survey, compared to 13% in the previous survey.
Supply Chain Disruptions
- Supply chain disruptions have significantly impacted about a quarter (26%) of owners. Another 13% said the disruptions had a moderate impact.
- Thirty-eight percent of employers report a significant or moderate staffing shortage. Of those businesses impacted by a staffing shortage, 45% reported a significant or moderate loss of sales due to a lack of employees.
- The number of small business owners who have been vaccinated has doubled since March: from 26% to 51%. Thirty-seven percent report that they don’t intend to get vaccinated.
Amazon’s impact on small business
- When asked about the impact of Amazon on their business, 24% of small businesses report that Amazon directly impacts them, mostly negatively.
- Thirteen percent of all respondents compete with Amazon for sales of their products or services and 1% sell on the Amazon platform.
- About half (54%) of small businesses purchase inventory or supplies for their business through Amazon.
This publication marks NFIB’s 17th Small Business COVID-19 survey assessing the health crisis impact on small business operations, economic conditions, and utilization of the targeted small business loan programs. Read the complete 17th edition survey results here.
The full series of NFIB COVID-19 surveys began in early March 2020 and can be found here.