The Long-Term Economic Impact of COVID-19 on Small Business

Apr 15, 2020

The Long-Term Economic Impact of COVID-19 on Small Business

It was a shock to hear recent official federal estimates that we could see 100,000 to 240,000 Americans die from coronavirus infections and see the unemployment rate could hit an unthinkable 32%. It’s even more of a shock that these projections seem to be slowly coming true, with shutdown orders bringing businesses to a standstill and a COVID-19 recession appearing to be a looming certainty.

The economic devastation is hitting everyone from small businesses on Main Street to big investors on Wall Street—not just in the US, but globally too.

“We are now in recession. It is way worse than the [2008] global financial crisis,” International Monetary Fund Managing Director Kristalina Georgieva recently told the World Health Organization. “This is, in my lifetime, humanity’s darkest hour.”

We’ll hope it doesn’t come to that. But previous projections of the economy being back open by Easter certainly failed to become reality. A full 17 million jobless claims were made in the last 3 weeks, and analysts expect April will turn out to be a far worse month. The COVID-19 economic carnage probably still has not peaked, and your small business needs to focus on short-term survival for as long as it takes for the economy to weather this storm.

The big question, though, is how long it will take to weather this storm and return to economic normalcy. 

In China, which is a month or 2 ahead of us on public health efforts and economic stimulus measures, everyday life and financial activity are showing signs of returning to normal. CNN Business notes that Germany and Austria are tinkering with models to get the uninfected back to work while still containing virus spread.

But even these are not long-term projections—they’re just optimistic models of where we could be by the early summer. And any delicate progress could suffer a horrifying relapse.

To figure out the long-term outlook for US small businesses in 2021 and beyond, we have to look at extremely speculative crystal ball projections. But we turned to some of the sharpest financial analysts in the business analysis sector. They all agree that everything is dependent on the public health priorities of limiting fatalities with a vaccine, distributing robust testing systems to determine who is infected and who’s not, and the ability of us as a society to maintain physical distancing before we’ll experience any possible forthcoming economic recovery.

About the Author

Joe Kukura

Joe Kukura

Joe Kukura is a San Francisco freelance writer whose work also appears in SF Weekly and SFist. He’s written financial advice for NerdWallet, tech industry analysis for the Daily Dot, sports content for NBC Bay Area, and good, old-fashioned clickbait for Thrillist.

See all articles by this author

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