The NFIB Research Center released its latest COVID-19 survey on the impact the pandemic has had on small businesses. This survey marks NFIB’s 16th survey in the series, which started in early March 2020. Thirteen percent of small business owners report that they will have to close their doors if current economic conditions do not improve over the next six months, down from 25 percent in December.

“After a year of the COVID-19 pandemic and the challenges that came with it, small business owners are working hard to see a brighter future for their businesses,” said Holly Wade, Executive Director of NFIB’s Research Center. “Economic conditions seem to be easing for some, but the overall recovery remains uneven across small business industries. It is crucial that small businesses are given the resources and flexibility needed to ensure they will have a successful recovery.”

Key findings include:

Almost three-quarters (74 percent) of 2020 Paycheck Protection Program borrowers have applied for loan forgiveness.

• Twelve percent of borrowers are not yet ready to apply for forgiveness and 16 percent are ready but their lenders are not yet accepting applications.
• Seventy-three percent of those who have applied for PPP loan forgiveness have received final confirmation of their approved forgiveness amount from the SBA.

The CAA reopened the PPP application and of those owners who did not receive a first-draw PPP loan in 2020, 20 percent have applied for a first-draw PPP loan.

•     Fourteen percent are planning to apply or are considering applying.
•     The remaining 66 percent are not planning to apply for a first-draw PPP.

Of those businesses who received a first-draw PPP loan in 2020, 42 percent have already applied for a second-draw PPP loan and 2 percent are planning to apply for one.

• Another 7 percent are considering whether to apply for a second-draw PPP loan or not.

Seventy-eight percent of those who have applied for a second-draw PPP loan have been approved and 1 percent were denied.

• Eighteen percent have not yet heard from their lender.

The 25 percent reduction in gross eligibility rule was the main factor for about three-fourths of those first loan PPP borrowers in not applying for a second-draw PPP.

• Another 17 percent were eligible but didn’t want to take a second loan.

The America Rescue Plan Act of 2021 extended the Employee Retention Tax Credit (ERTC) through the end of 2021, however, still very few employers know that it exists.

•     Only 7 percent of small business owners are very familiar with the program and another 35 percent are somewhat familiar.
•     Seventeen percent of small employers have taken or plan to take advantage of the tax credit in 2021.
•     Nearly half (47 percent) of small employers report that they might take advantage of the tax credit in 2021, presumably after they learn more about the program.

Sales levels are 50 percent or less than they were this time last year (2020) for 22 percent of small businesses with another 21 percent at sales levels of 51 percent-75 percent of pre-crisis.

• Thirty-five percent of owners are back or nearly back to where they were with sales between 76 percent-100 percent of levels in 2019 with another 23 percent exceeding sales levels during this time in 2019.

Thirteen percent of small business owners report that they will have to close their doors if current economic conditions do not improve over the next six months, down from 25 percent in December.

• Fifteen percent of owners anticipate they will be able to operate no longer than 7-12 months under current economic conditions.
• Just under three-fourths (72 percent) are better situated and do not anticipate any near-term problems.

The economic outlook has improved slightly over the last few months with 11 percent of owners reporting that conditions are back to normal now, a six-percentage point improvement from late January.

• Twelve percent of owners anticipate it taking until the first half of 2021 for economic conditions to improve and 34 percent anticipate sometime in the second half.
• About one-third (32 percent) of owners are less optimistic and expect conditions not to fully improve until sometime in 2022 and 11 percent after 2022.

Almost half (44 percent) of owners have had an employee take COVID-19 related sick or family leave.

• Of those employers, 81 percent offered paid leave to all or some of those employees taking COVID-19 related leave and 42 percent of them have claimed the tax credit for reimbursement of those costs.

As more of the general population are eligible to get the vaccine, 45 percent of small employers will encourage their employees to get vaccinated and 2 percent report that they will require their employees to be vaccinated.

• Another 5 percent of small employers are considering encouraging or requiring the vaccination.
• Twenty-six percent of small business owners have been vaccinated and another 23 percent plan to get vaccinated as soon as it’s available to them. Sixteen percent report that they will also get vaccinated, but not right away.
• hirty-five percent report that they will not get vaccinated, lower than the 44 percent who reported the same in December.

As the minimum wage debate continues, there has been discussion on those employees who receive tips as part of their overall compensations. About 7 percent of small employer firms have employees who receive tips.

• About one-third of these firms report that all of their employees receive tips as part of their compensation with another 39 percent of employers reporting that between 50-99 percent of their employees receive tips.
• Half of small employers with tipped employees report that employee tips make up less than one-quarter of their overall salary.
• About 30 percent say that tips make up between 25-74 percent of overall salary and just 9 percent report that tips generate 75 percent or more of their employees’ salaries.
• Over half (53 percent) of those with tipped employees are in the restaurant industry.

This publication marks NFIB’s 16th 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. The first series was published in early March 2020 with subsequent publications every two to four weeks, found here. The full survey of the 16th edition is available here.