In the early days of loan applications under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, an Alignable/Harvard Business School (HBS) Survey and a second poll point to serious obstacles faced by small businesses that need funds soon to stay afloat. According to a recent Alignable Pulse Poll of 31,800 small business owners in the U.S., nearly 67 percent say they haven’t applied for the CARES Act loan yet; and the Alignable/HBS Survey of 5,800 small business owners revealed the reasons why:
● 31 percent say they distrust how loan forgiveness will be established and upheld by the federal government and/or the banks
● 29 percent assume they don’t qualify
● 24 percent are concerned about timing: that the cash won’t come soon enough or it won’t last long enough to weather extended quarantines
● 10 percent think the process is too much of a hassle
Meanwhile, more than 33 percent of small business owners have applied for loans, but still wonder if or when they’ll get their money.
● Only 1 percent have been approved
● Nearly 71 percent applied and are awaiting approval
● 3 percent were told they don’t qualify
● And around 25 percent of them learned that their banks couldn’t process applications yet
“While it’s encouraging the government has earmarked $349 Billion for small businesses across the U.S. and federal officials are looking into additional funding, that’s only part of the equation,” said Eric Groves, Alignable.com co-founder and CEO. “Engineering the infrastructure needed to quickly get this cash into the bank accounts of small business owners is what must be tackled right now, or we risk losing countless small businesses.”
Additional statistics from the Alignable/HBS Poll demonstrate just how devastating the effects of the Coronavirus have been so far, as more than 43 percent of small businesses have temporarily closed already.
The hardest hit industries include: retail, arts and entertainment, personal services, food services and hospitality. Less disruption is reported among categories including: finance, professional services and real estate.
Despite its sobering findings, the Alignable/HBS Survey did indicate some strong optimism among small business owners for the end of this year. More than 90 percent of small businesses said they would be “at least somewhat likely” to be open in December 2020, with 64 percent saying it’s “very or extremely likely.”