74% of small business owners have taken on debt to offset financial losses from COVID-19

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CHARLOTTE, NC, September 30, 2020 /PRNewswire/ — As small business owners continue to navigate the COVID-19 crisis, many are grappling with significant new challenges. according to a current LendingTree survey of nearly 1,400 small business owners, everyday business disruptions have resulted in unexpected layoffs and financial concerns. In fact, nearly three-quarters of small business owners have taken on debt to offset financial losses. And only a few companies are fully operational again. But it’s not all doom and gloom, the poll found. The majority of small business owners remain optimistic about the post-pandemic future.

Main results:

  • About 74% of small business owners have taken on debt to deal with the financial losses caused by the coronavirus crisis. Most notably, 37% took on credit card debt and 28% borrowed from friends or family.
  • Only 10% of small business owners who have received funding from the Paycheck Protection Program (PPP) say they have alleviated any financial hardships they are facing. The majority (62%) said the funds had helped somewhat, but 28% said the PPP funds had not alleviated their difficulties at all.
  • Of the 79% of small business owners who have shut down or reduced operations, only 13% have since fully resumed operations. Most (63%) were able to resume operations to some extent, while 23% were unable to resume operations at all.
  • Additionally, 43% of small business owners said their gross income fell by 51% or more because of the pandemic.

“Only 13% of our respondents have been able to fully resume operations, meaning almost 9 out of 10 are not there yet,” he said Hunter Stunzi, senior vice president of small business and investments at LendingTree. “It’s a real drain on revenue and on their ability to retain and pay their employees.”

Our survey found that 55% of small business owners who applied for PPP funding received the funding they requested. It’s worth noting that this is far better than the 5% that received financial relief in the first round in early April. Be that as it may, Stunzi likened the program to a temporary band-aid.

“It was really kind of a one-off shot in the arm for a few months of payroll, utilities, or rent,” he said. “But now that they’ve worked through this and the government hasn’t been able to pull itself together and give these Main Street companies more incentive, many will never come back and will just go out of business.”

To view the full report visit: https://www.lendingtree.com/business/small/debt-covid-19-financial-losses-survey/.

methodology

LendingTree conducted an online survey of 1,397 small business owners who had previously applied for financing through the LendingTree Small Business Loan Database. Respondents were emailed a link to take the survey, which was conducted using Qualtrics September 4th to 11th, 2020.

About LendingTree

LendingTree (NASDAQ: TREE) is the nation’s leading online marketplace, connecting consumers with the choices they need to be confident in their financial decisions. LendingTree enables consumers to buy financial services the same way they buy airline tickets or hotel stays, by comparing multiple offers from a nationwide network of over 500 partners in one simple search and choosing the option that best suits their financial needs. Services include mortgage loans, refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring, customized recommendations to improve credit scores, and alerts when there are opportunities to save money. In short, the purpose of LendingTree is to simplify financial decisions for life’s meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, visit www.lendingtree.comcall 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media contact:
Nancy Jones
[email protected]

SOURCE LendingTree.com

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