Nearly eight in ten small businesses have received aid from the federal government since the coronavirus pandemic began, but only a small percentage have sought help from local sources, including family or friends.
A recent study by LendingTree analyzed results of the U.S. Census Bureau’s Small Business Pulse Survey to find the percentage of small business owners in the 50 largest metro areas who had reported requesting financial assistance from state or local government and family or friends.
LendingTree Survey on Pandemic Loans from Family and Friends
About 5% of businesses asked for help from state or local governments, while just over 4% sought aid from family or friends, according to the census bureau.
Small businesses in the Washington D.C. metro area led the way in seeking help — 14.9% from state and local governments, and 4.1% from family and friends. Baltimore-area businesses came in second, with 13.9% seeking help from state and local governments and 2.9% from family and friends.
Birmingham, Ala. ranked last among the 50 largest metros in requesting local support, LendingTree results showed. None of the small businesses in the area asked state and local governments for help, and less than 1% sought aid from family or friends.
“As the data shows, small businesses haven’t turned en masse to their local communities for emergency aid,” said Derek Miller, senior research analyst at LendingTree, who reported on the issue. “The general belief was that after business shutdowns eased … businesses could begin to return to normal operations.”
With the August 8 deadline for applying for PPP aid now passed, and state and local governments already looking to cut their budgets, local communities may be one of the few sources left for small businesses to look for help. How much they will be able to support their local businesses remains a question, however.
“[W]e may see some kind of small business crisis in the same way we could see an eviction crisis now that the coronavirus relief bill unemployment benefits have expired,” Miller said.
Visit the LendingTree website to read the full study findings.
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This article, "Only 4% of Small Businesses Looked to Family and Friends for Financial Help During Pandemic" was first published on Small Business Trends
August 17, 2020 at 10:04AM
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Joshua Sophy, Khareem Sudlow
