Minnesota small business owners have been hit hard by the governor’s stay-at-home order. According to a recent survey of NFIB Minnesota small business owners, 69% say they have been negatively impacted.
“While the governor took positive steps earlier this week to re-open some of Minnesota’s economy in the form of retail stores, many other Minnesota small businesses are eager to get back to work in a responsible way. If they can’t, many fear they won’t be able to make it through this crisis,” NFIB State Director in Minnesota Mike Hickey said in a news release. “The governor needs to level the playing field and allow all small businesses to open their doors. At the very least, the governor and the House can support a bi-partisan plan passed by the Minnesota Senate to give small businesses some monetary relief while they are trapped in shut down mode. Hopefully the House and Senate can reach an agreement on this important measure that provides a lifeline to many financially struggling small businesses.”
This week, the Minnesota Senate passed legislation to make available $60 million in the form of a Small Business Guarantee Loan program for small businesses in crisis. The bill takes $57.6 million from the federal Coronavirus Relief Fund and $2.4 million from the Small Business Guarantee Loan program to provide relief grants to Minnesota small businesses.
Under the proposed legislation, a small business would qualify for the low interest loan if they are located in Minnesota, are owned by a resident, employ fewer than 50 workers and can demonstrate financial hardship from the coronavirus crisis. Eligible businesses can receive up to $10,000 to use for working capital such as payroll, rent, mortgage, utilities, and other business expenses. A minimum of $15 million must go towards minority, veteran and women owned small businesses.
The survey results come on the same day that NFIB found small business optimism continues its two-month slide. Real sales expectations are at a record low, but small business owners expect better business conditions over the next six months.
Small business optimism took another dive in April, falling 5.5 points to 90.9, with owners expressing certainty the economy will weaken in the near-term, but expecting it to improve over the next six months. NFIB said the Optimism Index has fallen 13.6 points over the last two months, with nine of 10 Index components declining in April and one improving.
The NFIB Uncertainty Index fell 17 points in March to 75, with most owners quite certain that the economy will weaken in the near-term. However, reports of expected better business conditions in the next six months increased 24 points, rebounding from a 17-point decline in March. Owners’ optimism about future conditions indicates they expect the recession to be short-lived.
Other key findings from April’s Optimism Index included:
- Earnings trends declined 14 points to a net negative 20 percent. Among owners reporting weaker profits, 39 percent blamed weak sales, 16 percent blamed usual seasonal change, six percent cited price changes, four percent cited labor costs and two percent cited materials costs. For owners reporting higher profits, 63 percent credited sales volumes and 17 percent credited usual seasonal change.
- The percent of owners thinking it’s a good time to expand lost 10 points falling to three percent, its lowest level since March 2010.