While the pandemic appears to be receding as ever more Americans get vaccinated against Covid-19, it's important to remember that many small businesses are still hurting--and as such they should stay top-of-mind for the public and public policymakers.
A recent webinar from the Equifax credit report company, which has unique insight into the finances of small businesses, showed that some sectors are clearly still recovering from the economic crisis that accompanied the pandemic. Year over year data from March 2020 to 2021 show that small business loan delinquencies are down. Yet certain industry segments, especially accommodations--for example, hotels and restaurants, and recreation--as well as entertainment, retail, and healthcare are showing continued loan defaults over the last year. And while small business lending is on the rebound, it is still below pre-pandemic levels for key economic sectors.
Simply put: business is not all the way back. While the Centers for Disease Control (CDC) guidance and state restrictions on mobility and economic activity are noticeably easing even in the most cautious of locations, 21 states and territories still maintain some level of capacity limits on small businesses and public gathering spots, including restaurants and venues.
The federal government may step up and add more funding to the Restaurant Revitalization Fund, a $28.6 billion grant program administered by the SBA, and there's some talk of a separate hospitality-focused program, but neither offering likely would kick off until early July.
Policymakers should recognize that there is a limit to what can be done by policy. In other words, government stimulus is not substitute for open economies where people can freely gather and exchange goods and services. While safety is vital, survival of the nation's small business economy should be, too. Getting out there and talking up small business now has to be part of the playbook.
Also, even with the pandemic receding, small businesses need to continue to pivot to having an online presence. Consumers are wedded to their smartphones, so understanding the basics of digital marketing is a form of customer service and a small business necessity.
Finally, the public also has a role in helping small businesses this summer. We need to recognize that the small business sector is not out of the woods yet, even if Covid is receding. It's our time to get out of the home and move: We all need to walk more and your local small businesses need your foot traffic. Our country's small businesses need us now more as consumers buying their goods more than as taxpayers keeping them afloat.
