Along with causing a major threat to public health, COVID-19 has destroyed many economic sectors too. It has mainly affected many small businesses around the world. These businesses had to suffer huge dislocations just after the spread of the pandemic and during the phase before getting government help.
In the survey conducted among the 5,800 small businesses, 43% had shut down after the onset of the pandemic. The decrease in demand and the concerns over the health of the employees were the major reasons for the shutdowns. The interruption in the supply chain was not a big deal in the closure of these businesses. Several businesses also reduced their employees by 39%.
The impact of the pandemic differed in various industries like entertainment, hospitality, food services, personal services, etc. The employment opportunities were reduced by 50% in all these industries. However, the industries like real estate, professional service, finance, etc had fewer disruptions as they could easily change to remote operations.
Financial fragility was also a major concern for businesses. The money in the hands of the businesses could only help them last for two months or less. The companies that had more cash expected to open their businesses within a year. But during the COVID-19 pandemic, Bitcoin surged 300% amid speculations in the financial market and investors flocked to the digital currency due to low-interest rates in the market. Crypto usage has increased drastically among people more than ever, especially with the advent of trading bots like Bitsoft 360. Because such bots accurately execute trades on behalf of users with high success rates. If you are interested, check Bitsoft 360 test 2023 to check the reliability of the platform.
The duration of the crisis also played an important role in the total impact. Most of the businesses were interested in taking the government help and expected that this aid will help them with their business decisions such as the decisions on layoffs and to come back stronger in the business. However, certain businesses were reluctant to apply for the aid as they had concerns over their eligibility and the complexity of administration. Bureaucratic complexities were also cited as a reason for not applying for governmental help.
Loan policies and traditional loans also provided support for the businesses in their dreams of survival. Several private institutions and financial services were ready to provide loans in addition to the governmental loan policies. However, the interest rates were much higher than the governmental loans.
48% of employees of these small businesses relied on the comeback of their companies from the destruction caused by the pandemic. Closure of the companies leads to a massive job loss. Some workers could find new jobs, but the job dislocation was huge, more than any situation brought. Businesses also had to make sure that they got enough funds without much complexity.
Small businesses are considered to be the backbone of every economy. The distraction to these businesses affects both the economic and social systems around the world. Experts consider the crisis of COVID-19 after World War II. It is not a secret that there has been a short-term contraction in the global economy due to the pandemic. To avoid poverty, unemployment, and recession, it is very important to bring these businesses back to life. Governments all around the world are taking economic as well as health measures to overcome the challenges caused by the pandemic. Many of these businesses are going online to create more opportunities. The internet has been helping them to stay alive and come back stronger amidst this pandemic.