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COVID-19 Is Shattering Small Businesses

At the beginning of March, Split Creek Farm, a goat farm in Anderson County, South Carolina, supplied about 45 mostly high-end restaurants with bulk orders of goat milk, cheese and yogurt. Getting to that number was no small feat: Co-owners Sandra Coffman and Jessica Bell had spent years transforming the farm into a wholesale business in hopes of making it more financially stable. But just a couple of weeks later, all of the restaurants they’d built relationships with had closed their doors. None stayed open for takeout or delivery as quarantines took effect to stem the tide of the coronavirus, said Coffman, leaving Split Creek with just a handful of retail accounts that purchased small quantities of product from the farm for resale.


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“Our sales basically stopped overnight,” Coffman said. One week the business received only a single payment, for $85.

Small businesses like Split Creek Farm — typically defined by the government as businesses with under 500 employees — have been hit hardest by the pandemic. Most have had to lay off workers and shut their doors in response to regional lockdowns, and as time goes on, many are facing the prospect of never reopening. According to a May report from the U.S. Chamber of Commerce, more than one in five said they are no more than two months away from permanently closing.

a person petting a dog: Split Creek Farm co-owners Sandra Coffman and Jessica Bell. Their South Carolina business was saved by community efforts to raise money and garner new clients. © Courtesy of Sandra Coffman Split Creek Farm co-owners Sandra Coffman and Jessica Bell. Their South Carolina business was saved by community efforts to raise money and garner new clients.

More than 30 million small companies make up 99.9% of all U.S. businesses, according to a 2018 Small Business Administration report, and employ just under half of the workforce. If small businesses can’t afford to rehire workers in the same numbers or are pushed to the brink of bankruptcy, advocates warn it could drastically hamper the country’s post-pandemic recovery. Some government officials optimistically forecast a slowdown to last a few months or years; the Congressional Budget Office projects a decade-long recession. 

As states begin to ease lockdown orders, small business owners say they fear that reopening the economy won’t be the panacea many politicians seem to think it will be. The small businesses that have so far managed to stay afloat have done so due to some combination of innovation, government assistance and sheer luck (the latter two of which threaten to run out). 

Many find themselves relying on community outpouring of support, as the “shop local” rallying cry reverberates across the nation. Some people have prepaid for services, such as haircuts, that they can redeem post-lockdown, or purchased gift cards to their favorite bookstores and restaurants. Students at the University of Chicago Law School built a website to direct Windy City residents to local stores. Instagram and Facebook have introduced features to help people promote in their social media posts the small businesses they love. State and regional legislators are urging constituents toward community stores, introducing spending incentives or proposing budget allocations to help small businesses compete. Facebook also launched a tool to help merchants set up e-commerce for free.

Coffman said that without support from folks in her area, Split Creek Farm would be doomed.

Farms were initially excluded from the SBA’s Economic Injury Disaster Loan (EIDL) program, a government loan program that allows small business owners to borrow up to $150,000. Farm owners only became eligible for the program’s second round of funding, which began on May 4 — nearly two months into the pandemic. Coffman and Bell were approved for a Paycheck Protection Program (PPP) loan — a separate loan program that requires funds to go toward keeping employees on payroll — which allowed them to continue employing the farm’s six staff members. But Coffman said they didn’t receive those funds until last month.  

The co-owners still needed money to care for their roughly 300 goats, who eat about $1,800 worth of food a week. And they had no idea what they were going to do with the 72 gallons of milk the goats produced every day without any restaurants to purchase it.

Coffman and Bell did what countless businesses owners across the country have done, and started a GoFundMe campaign. They managed to raise thousands through crowdfunding, but Coffman credits an Anderson County woman named Nancy Hellams for the farm’s survival. 

Hellams is a retired physical education teacher and a volunteer at an online hub of community goings-on. When she saw Split Creek was in trouble, she got local residents to donate funds — independent of the farm’s GoFundMe — and used the money to buy credit at the farm. She approached a handful of local restaurants that were still doing business and convinced them to add new menu items centered around goat dairy products — and to buy those products from Split Creek Farm with the credit. Two have continued ordering products from the farm.

If Hellams and the Anderson community hadn’t stepped up to help “we wouldn’t have been a business, it’s as simple as that,” Coffman said. “We would’ve been feeding our animals out of our retirement funds.”

Many small businesses were in a precarious state even before the pandemic. The consolidation of large corporations like Amazon has made it difficult for smaller enterprises to stay competitive, and about one-third of them close within the first two years of business. And it’s always been difficult for small businesses — especially new ones — to access loans and investment capital, particularly for business owners of color.

These inequalities were only magnified by the economic downturn spurred by COVID-19, especially as government officials put banks in charge of dispersing EIDL and PPP loans. Some experts say as many as 90% of minority-owned businesses have or will be completely shut out of the latter program. 

“These programs are being run through an intermediary — that is, the banks, which favor people who already have relationships with them,” said John Arensmeyer, the CEO of the advocacy group Small Business Majority. “Underserved communities in particular may not have those relationships.” 

a group of people sitting at a desk: Natasha Crosby, a real estate agent shown here hosting a seminar for first-time home buyers, worries about the long-term outlook for her Virginia-based business. © Ariane Swift-McKeller Natasha Crosby, a real estate agent shown here hosting a seminar for first-time home buyers, worries about the long-term outlook for her Virginia-based business.

Natasha Crosby, a Realtor in Richmond, Virginia, is one business owner who found herself in a difficult position with banks. Though she had a years-long relationship with a regional bank, by the time it began accepting applications for PPP, the $349 billion program had run out of cash. Crosby said she only managed to secure funding in the second round of disbursements because someone who had read a news story in which she was quoted reached out to her and helped her make a connection with a different bank in the area. Crosby described it as a stroke of luck most people wouldn’t be able to count on to get the assistance they need.

“I’m very grateful for that obviously, but we need to ask the question, Why were banks able to deny people, or say they weren’t going to open up the program for people who weren’t already customers? Why did they get that leeway to hurt people?” Crosby said. “Historically, Black-owned businesses are underbanked. If you let banks decide who gets funds, look what happens.”

Though both Coffman and Crosby have now received PPP funds — and though their respective states, South Carolina and Virginia, have taken initial steps toward reopening — there’s no guarantee that their businesses will return to normal.

Coffman said that some of the restaurants the farm supplied pre-pandemic are resuming their orders, but at a much lower volume than before. And many restaurants are changing their menus, which in some cases means less business for Split Creek. “Their ordering patterns are different,” she said. “Whereas we might once have gotten a $400 order from a restaurant,” now some of those orders have been cut in half.

Since Crosby’s livelihood depends on people being able to afford to buy homes, she worries that staggering unemployment rates threatening to linger for years will make it virtually impossible for her to conduct her business as she did before. “The idea that you can just flip a switch and everything will go back to normal is ridiculous,” she said. “There are a ton of businesses, including mine, that are going to take time to gear back up.” 

GoFundMe campaigns and creative fundraising tactics — like the one that helped Split Creek Farm get through its roughest patch — may be able to prop up businesses in the short term, but experts say they need assistance from the government for the long haul. And it will be a long haul, they say. 

“There’s no way businesses can raise the kind of money the government can provide, especially since you’re raising money from people who have also been impacted by the economy; they have a lot less disposable income,” Arensmeyer said. “The government is in a unique position to step up in a crisis.”

Arensmeyer’s organization and others, such as Main Street Alliance, an advocacy group for small businesses, have supported measures such as extending the coverage period for PPP loans (included in a bill enacted earlier this month). The groups also have pressed for the bill backed by Sen. Bernie Sanders (I-Vt.) to provide Americans with monthly $2,000 stimulus checks throughout the pandemic and for three months after.

Amanda Ballantyne, the director of Main Street Alliance, wants Congress to develop a two-year plan for small businesses rather than passing pieces of legislation that need to be updated or extended every few months. “Short-termism” won’t cut it, she said. 

Arensmeyer and Ballantyne also want to see the government help small business owners recover from damages that may have resulted from recent protests of racism. (Both of their groups have come out in support of the demonstrations)

“Property is not more valuable than human lives,” Ballantyne said, cautioning against placing too much emphasis on the destruction of some small business storefronts. “Still, it’s important we maintain the wealth those businesses created for those communities, especially if they’re Black and Latinx.”

To Crosby, it is all inextricably connected — the racial disparities that Black business owners face underscore the social that make coronavirus much deadlier for Black people, and the ones Americans are protesting in the streets.

“At this moment it’s imperative for all of us to look at how we can support Black businesses and Black people through a worldwide pandemic,” Crosby said. “If we want to examine the injustices that have taken place, then let’s really put our money where our mouth is.” 

Ballantyne worries that letting small businesses fail will create deeper inequalities in the economy, allowing big businesses to grow even bigger and hurting small business owners, particularly those who come from marginalized communities. “If we lose significant portions of the business sector, we’ll end up in a hyper-consolidated marketplace,” Ballantyne said. “That will create more barriers to entry for new entrepreneurs, especially for [aspiring] business owners of color who want to build wealth for their communities.” 

“This is fundamentally a question not just about the economy we want but about the kind of world we want to live in,” she said.

HuffPost’s “Work In Progress” series focuses on the impact of business on society and the environment and is funded by Porticus. It is part of the “This New World” series. All content is editorially independent, with no influence or input from Porticus. If you have an idea or tip for the editorial series, send an email to

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