Let’s be clear: coping with the coronavirus crisis isn’t easy for anybody.
Entrepreneurs know this all too well, as many have had to either radically shift their business models — or close all together. But as this report from personal finance site WalletHub reveals, small business owners in some states are getting hit harder than others.
Using data from the U.S. Census Bureau, the Bureau of Labor Statistics, the Small Business Administration and more, researchers reached this conclusion by examining a number of factors, from the number of small businesses in a given state operating in high-risk industries to shared credit conditions like average loan interest rates from the SBA. By examining those metrics all together, WalletHub put together a ranked list of which states’ small businesses will be most, and least, impacted by the spread of the novel coronavirus.
They ultimately found that Hawaiian entrepreneurs are feeling the effects of the pandemic on their businesses the most, followed closely by Nevada.
Other research is just as sobering for residents of all 50 states. Earlier this month, the U.S. Chamber of Commerce released its own report on the state of America’s small businesses. It stated that nearly a quarter of them have already had to shut their doors — a number that’s expected to inflate as 40 percent of businesses still running anticipate having to, at least temporarily, shut down operations as well.
If you own one of those struggling firms, you have options. The federal government has already set aside $350 billion for small business loans as part of the $2 trillion coronavirus bill passed last month — and recently, the Treasury indicated it would ask Congress for an additional $250 billion. In most cases, the loans are to be forgiven as long as the businesses don’t lay off employees or reduce wages.
In addition, several large financial institutions have offered breaks to customers or made donations toward public relief efforts. And your local government may have options that may apply to your business’ unique situation — numerous cities and states are instituting localized policies to assist entrepreneurs. So be sure to check with those institutions to see how they may be able to assist.
The 10 states impacted the most by coronavirus, according to WalletHub’s survey, are…
Hawaii’s largest industry — and the space in which the majority of the state’s businesses operate — is tourism, which has suffered significantly during the coronavirus crisis as no one can travel.
The majority of Nevada’s employees work for firms in the tourism space, meaning that a significant amount of workers will be hurt by small business lay-offs and closures.
3. South Dakota
South Dakota’s largest industry is agriculture, and agricultural trade has been negatively impacted by the spread of the virus — meaning that small businesses in this space will feel the pinch. This state also ranks very low in business vitality compared to the rest of the nation.
Mississippi is another agriculture-rich state, so it can expect to see similar troubles as South Dakota. It also has one of the largest spikes in unemployment claims following the coronavirus outbreak, as well as an even lower business vitality ranking than South Dakota.
5. South Carolina
Another state where agribusiness is the leading industry, South Carolina businesses also have cause for concern. Also, business owners in South Carolina turn to the SBA for loan assistance more than any other state in the country.
Louisiana leads the nation in unemployment claims filed since the coronavirus crisis began, WalletHub found. While many of its small businesses operate in less impacted industries, consumers usually patronize small firms that have been harder hit. With those businesses’ futures in question, Louisiana’s economy could suffer more than other states.
Like Nevada, a significant portion of Arizona’s small business employees work for ventures in disproportionately affected industries.
Small businesses in Nebraska are more reliant upon federal funding than nearly every other state in America — and as an unprecedented number of businesses turn to the government for assistance, accessing those funds could get trickier.
9. North Carolina
North Carolina small firms also lean heavily upon federal funds like SBA loans. And it, too, has one of the higher rates in the nation of unemployment filings post-coronavirus.
10. North Dakota
In addition to also seeing a significant spike in unemployment among state small business employees, North Dakota, too, sees a great deal of consumer expenditures made to small firms that operate in affected industries.
For more, visit WalletHub’s website for the full report.