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Why Is It So Hard to Aid Small Businesses Hurt by a Disaster?

Small companies’ lack of resources and credit histories are only part of the problem

Maria Watson
Wed, 06/10/2020 - 12:01
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The U.S. government has committed hundreds of billions of dollars to help small businesses weather the coronavirus pandemic. But early reports suggested larger companies were gobbling up much of the aid, while many of the neediest ones—particularly those with only a few dozen employees—weren’t benefiting.

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Very small businesses, particularly those operating on small profit margins, are especially vulnerable because they may not have the cash reserves to weather periods of economic uncertainty and typically have fewer ways to access financing. A recent poll by the U.S. Chamber of Commerce found that one in four U.S. businesses is two months away from permanently shutting down.

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