Even tho99ugh it might seem to everyone that since the reopening of the economy is going on, every business will get back on track, but that’s not the case. A new survey shows the brutal truth about how small businesses will perform poorly in the upcoming months. The federal government had to bail out lots of businesses from failing during this pandemic situation. More than $330 billion of loans have been given to these businesses, which is just a small amount considering the current situation. However, a new survey shows the situation will worsen in the upcoming months even after such huge help. More than a quarter of the small businesses which analysts surveyed are considering shutting down their businesses permanently.
12% of them are even in bankruptcy, which shows the real financial problem which small companies face during a pandemic situation. Under the Paycheck Protection Program, small businesses are receiving $10000 of emergency funding for their businesses. The Small Businesses Administration has let out $630 billion so far during a pandemic situation. The Federal Government can evaluate businesses like any other third-party credit rating agencies, in which they evaluate these companies’ financial performance.
The power to the federal government is also high as compared to private companies because they can seize the assets of the said company to which they gave loans. The pandemic situation is forcing small businesses that operate daily to file for bankruptcy. The situation is becoming harder every day to fight against the financial problem, no wonder why a quarter of businesses are thinking of shutting down. Now, analysts criticize and raise questions about giving so many loans that will ultimately hurt the economy. The situation is quite tense for small businesses, and it might not be entirely resolved until the pandemic is over.