A notable number of small businesses continue to invest in technology, although they remain in the minority. And while most SMBs believe they can keep their doors open in the near term, they say their challenges will become tougher if the COVID-19 pandemic drags on.
Nearly all of the SMBs surveyed by PEO TriNet and the Harris Poll—96 percent—believe they can survive for one month under current circumstances. However, that level begins to slip as time goes on, to 92 percent if the crisis continues for three months, then more precipitously if conditions extend for six or 12 months. (The companies polled had fewer than 250 employees)A notable number of small businesses continue to invest in technology, although they remain in the minority. @TriNet #HR #HRTech #SMB Click To Tweet
Although many companies are cutting expenses by reducing employee hours, imposing layoffs, cutting advertising spend or taking other steps, 78 percent plan to make strategic investments of one sort or another. Of those, 46 percent plan to spend money to increase their use of virtual technology.
It’s worth noting that in some comparisons, TriNet’s polling base is optimistic. A late-March poll from the U.S. Chamber of Commerce and MetLife found that 11 percent of SMBs were less than a month away from closing down, while 24 percent said they had two more months of breathing room. At the same time, 24 percent predicted they’ll be ready to hire again within a year. However, that’s down from 30 percent in 2020’s first quarter.
SMB Cash Concerns
The short-term optimism of SMBs holds even though 78 percent of the companies report dropping revenue and liquidity concerns. About 40 percent said they don’t have the cash necessary to last more than three months without help. Less than a third, or 31 percent, believe they can hang on for more than six months.
Federal assistance packages are offering some help, but appear to be far from perfect. Despite the media coverage given to the CARES Act and the Paycheck Protection Program, a number of SMBs are unsure of the programs’ specifics and whether or not they’re eligible to participate. For example, while 95 percent are aware of the CARES Act, 27 percent don’t know whether they can apply, or if they will.
By April 6, 40 percent of SMBs had attempted to apply for PPP funding, but 20 percent of those were unable to complete the process. Sixty percent said the loans are “difficult to access.”
The initial round of funding for the PPP has been exhausted, but on Monday negotiators in Washington were reportedly close to a deal that would infuse $310 million into the program, according to media reports.
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