By Jay Heflin
https://www.washingtonexaminer.com/author/jay-heflin
The coronavirus is single-handedly erasing millions of small businesses from the U.S. economy.
“They’re challenged,” said Rick Maicki, managing director at Berkeley Research Group, a global consulting firm. “I’m sure there will be small businesses after this thing clears up, but they certainly have a number of challenges.”
Before the pandemic hit the country in January, there were over 14 million small-business owners; by May, over 2 million of them had closed their doors, according to Robert Fairlie, an economist at the University of California at Santa Cruz.
The loss of more than 2 million small businesses over a four-month period is staggering. For comparison, 730,000 small businesses closed during the Great Recession that lasted from December 2007 to June 2009.
The prognosis for the rest of the year is that another 2 million small businesses could be lost by December, according to Oxxford Information Technology, a company that helps financial providers such as banks and credit unions grow their small-business customer base.
A chief reason why small businesses are vulnerable to the virus is that they have few resources to survive prolonged closings.
“The challenge for small businesses is that they don’t have a portfolio to balance off against [losses], so if their area gets shut down, that would be fairly significant for them,” Maicki said.
https://www.washingtonexaminer.com/news/millions-of-small-businesses-are-shuttering-due-to-the-coronavirus