As the coronavirus pandemic drags on, it is threatening an increasing number of small businesses — even many that were financially healthy before the crisis.
A wave of failures would prolong the recession, slow the recovery and perhaps enduringly reshape the American business landscape, accelerating corporate consolidation and the dominance of the biggest companies.
Federal initiatives have helped over the last five months. The Paycheck Protection Program provided hundreds of billions in loans and grants to businesses. A $1,200 tax rebate and a supplement to unemployment benefits provided billions more in spending money.
Now that aid is largely gone, and without more on the way, many businesses face a choice: try to hold on, or cut their losses? For the Cheers Replica bar in Faneuil Hall in Boston, the answer was to throw in the towel after nearly two decades in business.
“We just came to the conclusion, if we’re losing that much money in the summertime, what’s the winter going to look like?” said Markus Ripperger, president and chief executive of Hampshire House, the bar’s parent company.
“If we have to go through another shutdown or more restrictions, it’s going to be even worse for a lot more restaurants that are just barely scraping by,” he said.