Goldman Sachs: 40% of U.S. small businesses don’t have three months of savings
A Goldman Sachs survey found small-business owners short on savings. Shown is downtown Leon in Decatur County. (Photo by Perry Beeman/Iowa Capital Dispatch)
More than 40% of U.S. small businesses couldn’t cover three months of expenses with their current cash reserves, a Goldman Sachs survey showed.
Goldman Sachs’ 10,000 Small Businesses Voices program said the results are a “critical warning sign” that might mean policymakers will have to consider additional aid.
Small businesses have been a central part of federal pandemic aid programs.
Jayne Armstrong, Iowa District director for the U.S. Small Business Administration, said the federal government spent $8 billion for 173,382 pandemic-related Paycheck Protection Loans in Iowa alone.
Billions more were spent on other pandemic recovery programs, Armstrong said. “We also made up to six months of loan payments for new and existing loans during the COVID-19 pandemic,” she added.
Still, Armstrong said it is clear many small businesses are struggling, and the federal government is “committed to providing ongoing support to our small businesses, especially our most marginalized communities.”
“The pandemic has lasted far longer than anyone imagined and it continues to impact small businesses’ bottom line,” she added.
In the Goldman Sachs survey, 44% of small business owners said they have less than three months of cash reserves. Respondents said they feared another COVID-19 shutdown, if ordered, could make it hard to stay open.
The survey found that more than half, 51%, of Black-owned small businesses had less than three months’ worth of cash.
Thirty-one percent of all respondents said they are confident they would get access to funding, but that number was 20% for Black business owners.
A large number of business owners, 41% of the total, said they are concerned the debt that has piled up during the pandemic could make it hard for their firm to fully recover. That number was 55% for Black small-business owners.
With the delta variant bringing a new wave of mask-wearing and COVID concerns, 88% of survey respondents said they support additional federal aid.
“Eighteen months of COVID-related economic headwinds have battered America’s small businesses. While many storefronts are reopening, small business owners from across the country are sending a clear message that they need more relief in order to continue on their road to recovery,” Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices.
The survey of 1,145 Goldman Sachs program participants was conducted by Babson College and David Binder Research from Aug. 30 – Sept. 1.
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