Independent Banker - April 2021 - 57

even worse shape. " Some [business
customers] have had to make drastic
changes and concessions, and some
have had slighter adaptations, " says
Jim Gowen Jr., president and CEO
of $329 million-asset Merchants and
Planters Bank in Newport, Ark.
Many of Merchants and Planters
Bank's restaurant customers had to
rethink their business models and
offer delivery and takeout options.
Some of the specialty retail shops
embraced e-commerce, a major
challenge for those without websites,
the knowledge or man power to
manage them, or the resources to
outsource. Not every business made
it-but most did.
" Most small businesses are started
by very entrepreneurial, robust and
rugged individuals, " says Paul Merski,
ICBA's group executive vice president,
congressional relations and strategy.
He believes if small businesses
can get through the next quarter
or so, they'll benefit from " a very
positive rebound in small business
profitability and viability. "
They'll still need help, though. Nine
out of 10 small employer businesses
applied for emergency funding in
2020, including PPP funds, and 96%
received funding, according to the
Federal Reserve study. The second
round of PPP funding approved by
Congress in December may mean
the difference between survival
and dissolution for many small
businesses. Nearly two-thirds (64%)
of respondents to the Fed's survey
said they would apply for future
government-provided emergency
funding; 39% of those believed their
business was unlikely to survive
without it.
" Community
banking has
really found
itself with a
mission. We
really stepped
up and continue
to step up
for small
businesses, and
it doesn't stop
there. "
-Jeff Newgard,
Bank of Idaho
Small businesses owned by people
of color have been particularly hard
hit by the pandemic. Both Asianowned
(79%) and Black-owned
(77%) businesses were 50% more
likely than white-owned businesses
(54%) to report being in poor or
fair condition, the Fed found.
Among Black-owned businesses,
30% said credit availability was the
single most important challenge
presented by the pandemic (versus
12% of white-owned businesses),
while Asian-owned businesses were
most concerned about demand for
products and services (47% versus
36% of white-owned businesses).
Many businesses are still
struggling, but there's reason for
optimism. According to February
U.S. Census data, 28% of small
businesses said they'll need to
make new hires in the next six
months. And 31% plan on increasing
marketing and sales, and 14.1% will
make a capital expenditure.
While many small businesses
(45.8%) said that it will take more
than six months before their
businesses return to a pre-pandemic
level of operations, just 7.7% said
The state of small business
80%
had financial
challenges
during the
pandemic
78%
saw a
decrease in
revenue
46%
had to
let staff go
Source: Small Business Credit Survey, Federal Reserve Banks, February 2021
independentbanker.org Q 57
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Independent Banker - April 2021

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