Nearly 90% of SLO County businesses lost income due to coronavirus, survey shows
Nearly 90% of San Luis Obispo businesses have lost income during the coronavirus pandemic, according to a business climate survey issued by the San Luis Obispo Chamber of Commerce that includes responses from more than 230 business members.
Other data from the survey shows that of those responded nearly 52% of local businesses have canceled events, 32% have closed temporarily and more than 57% have not yet heard anything back on their stimulus business loan applications.
The survey provides detailed insight into the financial impact of coronavirus and shelter-at-home orders, as community leaders try to usher pathways forward to economic recovery.
The San Luis Obispo Chamber has been holding weekly webinars with experts in banking, loan processing and small business guidance in recent weeks to help inform business owners on how best to navigate uncharted waters. The chamber has about 1,400 members.
“We’ve been trying to help businesses however we can,” said Jim Dantona, the San Luis Obispo Chamber’s CEO. “It’s looking more and more like this won’t be a quick turnaround of the economy and this will be a longer term recovery.”
The chamber’s survey, which closed Monday after a week of input from local businesses, included 236 responses.
The South County Chambers of Commerce is conducting a similar, ongoing survey, and 107 businesses responded as of Tuesday, said Jocelyn Brennan, the organization’s CEO.
“Less than 5% of the survey respondents” received federal stimulus business loans, Brennan said, noting that additional funding was approved on April 24. “Will some of our businesses that are in the queue be funded now with the additional funding? We are holding our breath. I’m afraid that funding will be depleted by the end of this week.”
Survey shows SLO County business impact
The San Luis Obispo Chamber of Commerce survey indicates that local businesses are struggling with cash flow and the impacts of significantly reduced income.
Of the 201 businesses that responded to a question about revenue, 37% said business revenue has decreased by more than 75%.
About 73% of the businesses surveyed, or, 169 businesses, were based in San Luis Obispo with most of the rest scattered around the county. Respondents were from a wide range of industries including home building, insurance, fitness, transportation, real estate and food and beverage.
Revenue and cash flow was the “greatest need of assistance” facing about 79% of businesses polled, survey results showed.
Other needs included penalty free extensions on expenses such as rent, utilities, supplies and inventory, cited by about 40% of businesses that responded to the survey. About 21% were concerned about how to protect employees from COVID-19, and 14% needed guidance on workforce challenges, survey results showed.
About 27% of respondants said they had laid off one or more employee and about 24% furloughed one or more employee.
About 75% of those who responded — 156 businesses — said they rent their business space, and 65 hadn’t been able to pay their rent in full. Meanwhile, 87 businesses spoke to their landlords about a rent reduction or payment option, according to survey results.
The survey showed that 181 businesses applied for financial assistance through the Economic Injury Disaster Loan Program or Paycheck Protection Program — two types of business loans offered through the federal stimulus package.
Sixteen businesses, representing about 14% of the poll, said they’d either received partial or full payment of their loan request, while 28% were approved for loans but hadn’t received funding yet and 57% hadn’t yet heard anything.
Dantona said that the survey data may not represent all who received a stimulus loan as some businesses may not have answered that question.
A $484 billion relief package for small business assistance, approved April 21 by the U.S. Senate, provides another opportunity for businesses to receive government assistance.
“I think in the long term the government won’t be able to bail out all of the businesses that need it,” Dantona said. “It will take reopening the economy to incrementally get back to a place where businesses can earn the kind of revenue they need. Even if they’re 25% down, that’s more manageable until things can improve.”
SLO County business owners share insights
Several business owners commented in the survey about their current situations, some weighing the social benefits of stay-at-home orders with the economic costs.
“I know that my business will only see more impact as the crisis continues,” one respondent wrote. “Even when the stay-at-home order is lifted, the retail/hospitality industry is going to continue to be negatively impacted by high unemployment and the recession ... as people are being fiscally conservative and/or have no money for extras.”
“The shelter-in-place (order) needs to be removed ASAP to save small businesses from going under,” another respondent wrote. “
“While the shutdown is inconvenient, I rather suffer as a business, than have the community suffer from rushing a reopening,” one business owner said. “To prioritize financial wealth over the value of life would be a mistake.”
Other respondents talked about the challenges of getting business loans during the COVID-19 outbreak.
“I was looking to get the $10,000 loan for operating expenses and to pay myself and my business partner. They only gave me $1,000,” one wrote.” The application process left me hanging for three weeks not knowing if they received my application and if I would receive any money. My local bank couldn’t help me since I applied directly through the SBA website. It was very stressful and then ultimately disappointing.”
Another business owner said that the loan and grant process is “not set up properly.” “Large corporations or business are swallowing up the funds before small mom-and-pop businesses have a chance to even apply,” the person wrote.
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