By: First Union
These Are The Hardest Hit States Lacking Business Support
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Coming out of an unprecedented period of lockdown for over two months now, much smaller US businesses are facing challenges the likes of which they've never experienced. Keeping tabs on how the country's small businesses are bouncing back is critical to ensure the health of the economy. Problems arise however when attempts are made to monitor and track the progress/revenue intake of small businesses at the state level. What some new models have managed to show is that while yes, small business revenue has taken a nosedive nationwide, some states and their respective smaller companies are feeling the pressure quite a bit more than others.
Of course, the numbers are going to vary as every state essentially had their own response to COVID-19. From industry type to length and severity of the lockdown, the factors affecting small businesses took their toll in a multitude of ways as can be seen looking at some of the data from individual states.
We need only review information gathered from the likes of Washington D.C. and Hawaii for example, to see that the average small business revenue loss since mid-March comes in at around 60%. Whereas, businesses in Utah and Wyoming comparatively only experienced about a 25% average drop in revenue during that same time period. And while 25% is still a huge collapse, these regions still fared much better than others.
THE "UNEVENNESS" IN ACCESS TO FEDERAL AID
As of the end of the first week of May, the PPP has issued loans to over 3.5 million US businesses—a relief effort certainly of historic proportion. However, there is still over forty percent of small businesses that are waiting for either approval or funding, making their survival right now much more difficult.
And overall, there is a noted unevenness when it comes to which businesses in which states are receiving their approvals/funding promptly, versus those that are lagging quite a bit behind.
What we are finding is that those located in Midwestern states are generally ahead of the game when it comes to PPP funds; while applicants in coastal states (some of the hardest hit/) are waiting far longer for their loans to come through. Some attribute this to the fact that more rural areas such as the Midwest have an abundance of small local banks and thus the loans are being processed more efficiently with far less of a backlog. In urban markets, large national chains tend to dominate, and the lending process is far slower during this crisis with some of these larger banks.
In Florida and Nevada for instance, where small businesses experienced an average revenue decline of fifty percent, there are still major backlogs with the PPP loans. And fewer than forty percent of applicants in those states have actually gotten their money. This is a frightening scenario for many small business owners counting on those loans to save their companies.
At First Union Lending, we are here to help. We understand how important gaining access to PPP funds is right now. We are working with numerous clients across the country to get them the approval they need in order to weather this storm. Call today!