Partly True: Biden: Nearly one in six small businesses in the US have closed this year.

By: Nikita Kochhar
September 18 2020

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A record number of small businesses shut either temporarily or permanently in April. As lockdown restrictions were lifted many opened in some capacityDuring the Democratic nomination acceptance speech, Democratic presidential nominee Joe Biden claimed that one in six small businesses in the U.S. have closed this year. According to monthly survey data sets published by the U.S. Chamber of Commerce and Metlife that gauged the impact of the coronavirus pandemic on small businesses, Biden’s assertions about the closure of small businesses is partially true. The Small Businesses Coronavirus Impact Poll published on May 5, stated that in continuation with the trends established in March this year, the number of small businesses shutting down continued to climb. While one in four small businesses (24%) had shut down temporarily in the previous month, one in three (29%) respondents said they had shuttered their businesses temporarily in preceding last two weeks. This figure did not include small businesses that had closed prior to the two weeks before the April survey was taken. Also, more than one in five small businesses (22%) said they are two months or less from closing permanently. As lockdown restrictions started being lifted, small businesses started showing some signs of recovery. The subsequent edition of the poll published on June 3 stated that most small businesses reported being at least partially open. 79% of small businesses are either: fully (41%) or partially (38%) open. One in five are closed, either temporarily (19%) or permanently (1%). The July report found that almost 90% of respondents had reported their businesses are open in some capacity. 23% of small businesses report having temporarily closed at some point, unchanged from the end of May. In total, 86% of small businesses say that they are fully or partially open. 65% of businesses are concerned about closing their business or staying closed if there is a second wave of COVID-19. The last few months have been a struggle for survival for small businesses across the country, and this has been corroborated by other surveys. A survey conducted by Facebook in May in partnership with Small Business Roundtable as part of its data collection effort with the World Bank and OECD on the Future of Business reported that 31% of small and medium-sized businesses had shut down in the previous three months. Nearly 66,000 businesses had folded since March 1, according to data from Yelp, which provides a platform for local businesses to advertise their services and has been tracking announcements of closings posted on its site, the New York Times reported on July 13, 2020. From June 15 to June 29, businesses were closing permanently at a higher rate than in the previous three months, Yelp found. During the same period, permanent closures increased by 3 percent overall, accounting for roughly 14 percent of total closures since March. Since many small businesses were only temporarily shut and have kickstarted operations, we rate this claim partly true.