A survey of small businesses by Florida State University researchers has found that 15.2 percent of those studied have closed their doors permanently as a result of the COVID-19 shutdown.
Assistant Professor of Management Samantha Paustian-Underdahl led the research team that examined the effects of the COVID-19 pandemic on 567 small businesses and nonprofit organizations (NPO) throughout the United States.
Funded by the Jim Moran Institute for Global Entrepreneurship in the College of Business, the survey asked participants to provide feedback on employee layoffs, government loan programs, operating capacity and stress levels, among other factors, to measure how businesses have changed daily operations during this global pandemic.
It found that 15.2 percent of its participants closed permanently, and 14.5 percent of participants closed temporarily. Another 31 percent of participants are operating below 40 percent capacity, while close to 40 percent of participants are operating at 40 percent or higher during COVID-19.
Participants also were asked if they laid off employees during COVID-19—46.7 percent reported doing so, while 51 percent reported that they did not. The average number of employees laid off was 10.5.
“Small businesses and nonprofits have taken a huge hit during this time, with nearly 30 percent of our sample needing to close temporarily or permanently as of early May,” Paustian-Underdahl said. “The good news is that most organizations are getting some help.”
Of the participants who applied for government funding, nearly 92 percent received some type of financial assistance.
“Florida seems to be faring better than other parts of the country as only 10 percent of the 137 Florida businesses in our sample have temporarily or permanently closed, and only 32 percent have laid off any employees,” Paustian-Underdahl added.
Participants also were surveyed about their experience applying for and receiving funds from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). Results revealed that business owners and NPO leaders received funding from one of these government loan programs, but not both.
Of the respondents, 75.5 percent applied for one or both types of government aid. Of participants who applied, 28.9 percent received PPP funding only, 26.8 percent received EIDL only, 11.3 percent received both PPP and EIDL, and 8.3 percent did not receive anything.
Researchers also found that business owners and NPO leaders are experiencing different effects of COVID-19 on their overall well-being and performance, depending on their gender.
