Small businesses using personal funds to stay afloat during coronavirus crisis, study finds


A third of small businesses rely on personal funds to stay afloat during the coronavirus pandemic and subsequent economic blockade, according to new findings released Thursday.

A CreditCards.com report found that 35 percent of small business decision makers said that they or their business owners have used their own money to help the business survive the crisis. That includes 24 percent who say they or the owners used a personal credit card and 21 percent who used a personal savings account since March.

HALF OF THE WORK IN THE UNITED STATES LOST FROM VIRUSES MAY BE PERMANENTLY EARNED

Still, small businesses also turned to other resources during the virus outbreak: about 30 percent of respondents said they applied for and received loans through the $ 670 billion Taxpayer-funded Check Protection Program. If at least 60 percent of the money goes to keep payroll, the federal government will forgive it, essentially turning it into a grant.

Another 24 percent said they accessed cash from a commercial savings card, while 20 percent used a commercial credit card for financing. Another 9 percent said they took a different type of loan, according to the study.

CALCULATE HOW MUCH MONEY YOU WILL RECEIVE FROM THE SECOND STIMULUS SEE HERE

But small businesses said they need more financial help to ensure their survival: About 53 percent of small business decision makers said they require more sales or other assistance to stay in business until the end of the year. Nineteen percent of respondents said they want to see more government help.

“It is a very difficult time for small businesses,” said Ted Rossman, an industry analyst at CreditCards.com. “It is commendable to what extent these dedicated business owners are willing to go in search of their dreams. However, I am concerned about the debt they are taking on and how they are putting their personal finances at risk. ”

EXTRA $ 600 IN UNEMPLOYMENT BENEFITS END WHILE MILLIONS OF AMERICANS REMAIN OUT OF JOB

Democrats and Republicans are negotiating another round of virus relief, which will likely include additional assistance for the most affected companies. On Monday, Senate Majority Leader Mitch McConnell unveiled the Republicans’ HEALS Act, which, among other measures, would also make the most affected small business owners receive a second PPP loan.

Under the plan, aid would be limited to companies with no more than 300 employees, below the original limit of 500 workers established in the CARES Law. Part of the money would be reserved for companies with less than 10 workers.

“We are now beginning to see that as APP funds are depleted, some companies have to face once again the potential to fire some of their workers. And that’s why it’s time for a second round of PPP assistance, ”Senator Marco Rubio, chairman of the Senate Finance Committee, said Monday.

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