Fivestars, one of America’s largest local commerce companies, conducted a new survey that reveals the majority of America’s local merchants can only stay in business for 3-4 weeks under shelter-in-place orders. What’s worse, 6 percent of those surveyed have already closed permanently due to COVID-19 challenges and 22 percent are considering it. In its analysis, the company learned the first stimulus package falls short, and unless another stimulus is created, the smallest and most-vulnerable businesses that line America’s ‘Main Street’ will not survive the pandemic.
Fivestars, along with more than 13,000 business owners and constituents, is requesting Congress put into effect a Second ‘Main Street Stimulus Package’ to fulfill the outstanding needs that the first stimulus package falls short on by providing:
Immediate, interest-free deferral on commercial rent, mortgage, and commercial loans for impacted small businesses;
$300 billion in restart capital specifically earmarked for mom and pop small businesses under 20 employees, to help them reopen once the public health emergency is over, and for more of the funds to be direct grants or interest-free, forgivable loans
“Without local merchants, civic centers will be decimated, property values will go down and cities will lose desirability, not to mention the potential impact on our nation’s GDP,” says Victor Ho, CEO and co-founder of Fivestars. “We think $55,000 could be the magic number to make sure our neighborhood businesses can reopen their doors.”
The Current Stimulus Falls Short of $55,000 for Each Local Merchant
The current stimulus proves insufficient and slow as 43 percent of business owners have already been forced to lay off staff and an additional 22 percent were expecting to follow suit, according to the study. Among businesses that are currently closed due to government orders, 40% believe they are at risk of never reopening their doors. What’s more, 72 percent of small businesses, regardless of industry, can only afford to stay closed 3 to 4 weeks before implementing layoffs and/or closing the location permanently.
“I’m scared to death that I will have to declare bankruptcy. Every day is a new challenge. Cash is low and those payments are still there. No one knows how tough it is on the little guy. I’m fighting for every dollar. I won’t be able to hang in there forever. It’s a desperate feeling,” says Cathy Hougan, owner of the Ohio-based store, “The Artful Yarn.”
Currently, local merchants need an immediate pause in their fixed obligations to prevent them from collapsing. Upon restarting, they will need $55,000 on average to pay past-due rent, buy fresh inventory, hire and train staff and amplify the news in their local communities that they are back and open for business.
This unexpected financial burden will only continue to wreak havoc on local merchants as COVID-19 spreads and stay-at-home orders become mandatory. Among the most hurt are clothing stores down 97 percent, hair salons down 97 percent and nail salons down 99 percent. The more resilient local merchants include grocery stores down 46 percent, tobacco shops down 58 percent and pet stores down 57 percent. Coffee shops are down 76 percent and restaurants are down 74 percent and barely getting by with some sales with delivery and takeout.
To sign the petition, go to: www.change.org/save-small-business