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Small Businesses Hit Hard by Coronavirus Crisis, Survey Finds

By Dave Kovaleski - Mar 24, 2020 at 11:22AM

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Goldman Sachs expects a record GDP drop in the second quarter.

America's small businesses are struggling to stay afloat during this coronavirus (COVID-19) pandemic, according to a recent survey by Goldman Sachs (GS 0.48%).

The survey of more than 1,500 members of Goldman Sachs' 10,000 Small Businesses program revealed that 51% of small-business owners said they could not weather more than three months of the current economic environment. Further, 96% said they have already been affected by COVID-19 and 75% have seen reduced sales.

A man and a women look over documents in their small business

Image Source: Getty Images

Among other findings, 53% said their employees don't have the opportunity to telecommute; just 13% are confident in their contingency plan to meet their business needs; 67% don't know how to access or apply for emergency funding; and 75% feel they have little or no voice in the policies that impact them.

The survey asked respondents what government support measures would help them the most. Roughly 83% said grants, while 77% called for payroll tax cuts. Further, 75% said reimbursement for paid sick leave, 74% said delayed of tax payments, 73% said delay of mortgage payments without penalty, while 70% said loans with lower interest rates. Finally, 70% seeks a government-backed quick loans and 62% call for enhanced employment insurance.

At present, approximately 16 states have issued stay-at-home mandates to their residents, affecting about 40% of the population. Most of these states have closed nonessential businesses. Due to the lockdowns and social distancing measures, Goldman Sachs Research forecasts a 6% drop in U.S. GDP this quarter and a whopping 24% drop in the second quarter -- which would be the worst since the Second World War.

For the year, Goldman Sachs Research sees a 3.8% contraction in U.S. GDP and a 1% decline in global GDP.

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