Will Amazon Kill Small Business?

Submitted by Market Crumbs

Four weeks. That’s how long it took for all of the jobs created over the last 11 years since the Great Recession to be wiped out as a result of the outbreak of COVID-19.

The Labor Department reported yesterday that nearly 5.25 million Americans filed for unemployment over the last week. This brings the total over the last month to more than 22 million Americans. As bad as these numbers are, it’s likely they’re severely underreported as many people continue to have trouble accessing their state’s unemployment websites.

With millions out of a job, yesterday also brought news that the Small Business Administration’s rescue loan program has hit its $349 billion limit and is out of funds.

The SBA’s website said it is “unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.”

The onus is now on Congress to quickly expand the amount of fund’s available for the program. Besides the obvious reason that small businesses money, why is this so imperative?

Small businesses employ about 47% of all American workers and 7.5 million of them could permanently go out of business over the next few months if the effects of COVID-19 persist.

According to a survey of 5,850 small business owners conducted by Main Street America, nearly one-third of small businesses would go out of business if current conditions persisted for up to two months. The number jumps to two-thirds of small businesses going out of business if current conditions persisted for up to five months.

In terms of how many small businesses that could affect, the numbers indicate 3.5 million small businesses going out of business within two months and 7.5 million within five months.

Eight in ten of those surveyed have already temporarily closed their businesses, with more than half of them seeing their company’s revenues fall by at least 75%. More than 90% of those surveyed have seen their company’s revenues fall, while only 1.5% of business owners have seen their company’s revenues increase.

While small businesses remain temporarily closed without access to any more small business loans, Amazon has clearly been the beneficiary. With limited shopping options for consumers who are confined to their homes, shares of Amazon have hit fresh all-time highs for the last three days. Shares are now up more than 30% year-to-date, adding nearly $300 billion to its market capitalization.

With jobs being lost at an unprecedented pace and many small businesses facing an imminent threat of having to close for good, the ramifications of the economy remaining closed are getting more dire by the day for many