The deadly impact of Covid-19 induced lockdown is visible in business at a micro-scale. A recent survey by LocalCircles revealed that due to severe impact on lockdown 38 percent of startups have not funds left to continue their business while 30 percent have cash left to survive for 1-3 months.
The survey received overwhelming 28,000 responses from the SMEs, entrepreneurs, and startups.
The report shows that 4 percent of business has been already closed due to the recession caused by Covid-19. 16 percent of respondents indicated that they have cash left for the next 6 months while 12 percent of entities said they are at the brink of shutting down their business.
This survey by LocalCircile attempts to examine the impact of this pandemic and subsequent lockdown of businesses to curb the spread of local businesses and startups.
According to the report, most of the businesses have reported a 90 percent drop in revenue in the last two months of extreme restrictions on public activity, gathering, and business. The firms that lost a considerable amount of revenue during the past two months are running out of necessary funds to sustain their business. The report reveals that the percentage of startups and SMEs without funds has jumped from 27 percent to 42 percent from April to June 2020.
In the survey, entities and entrepreneurs were asked if they get benefited from the stimulus package announced by the government. 57 percent responded said they did not get any support from this package while 29 percent were not sure about its impact on the future of their business. Interestingly, only 14 percent of respondents were benefited from this package launched by the central government.
Most of the SMEs had not an active loan or debt in their book which was required to get the benefit of the stimulus package and hence did not support them in continuing their business after a massive loss during the lockdown, the report noted.
Gracia is a senior writer at Get Ignite, where she covers media and advertising and co-hosts the Original Content podcast. Previously, she worked as a tech writer at Adweek, a senior editor at the tech blog VentureBeat, and a local government reporter at the Hollister Free Lance. She attended Stanford University and now lives in Brooklyn.