COVID-19 impacts small businesses

Chaimae Hadane
Baltimore Watchdog Staff Writer

COLLEGE PARK, Md. – When the owner of College Park Bicycle got word a few weeks ago that nonessential businesses must close, he and his employees scrambled to shut down.

“We were told to shut down by 5 p.m.,” Larry Black, founder of the bicycle business, told The Baltimore Watchdog recently. “We were scrambling with some chores and then the mayor called to say bikes were essential.”

Kelsey Bryant Starr who operates a local yoga studio had a completely different experience.

“I was reading data that felt compelling,” said Starr. “What I read about the spread of the novel coronavirus and potential to overwhelm medical resources and staff, and the indication that those who are already at risk in our society (marginalized identities) would be most harmed through the spread of COVID-19 convinced me that we needed to close to help flatten the curve.”

Starr closed her shop on March 14, a few days before the forced closure of fitness centers, gymnasiums and areas with large public gatherings.

Most U.S. states have ordered all businesses to close except supermarkets, pharmacies, liquor and gun shops and a few others. The goal is to stop the spread of COVID-19, which has claimed nearly 20,000 American lives.

As of 2019, the Small Business Administration reported that around 594,000 businesses in Maryland are small businesses, making up 99.5% of state businesses. Analysts predict that up to 15,000 retail stores nationally will be permanently closed this year. The Economic Policy Institute predicts the coronavirus outbreak could potentially wipe out 3 million jobs from the U.S. economy before this summer.

Unemployment rates are increasing as businesses are forced to close, layoff or furlough employees due to COVID-19. The Maryland Department of Labor reported that a total of 108,000 unemployment claims were filed last week.

On March 23, Maryland Gov. Larry Hogan enforced the business closures, leaving open essential or critical industries such as health care, law enforcement, emergency workers, food, energy, water, transportation, public works, communications, government, critical manufacturing, financial services, chemicals and defense.

According to Maryland Health Department statistics, the state has more than 6,185 confirmed coronavirus cases with 138 deaths.

By the time Hogan announced forced closure, Starr said she was at peace with the decision she made. Numi Yoga already was set up and offering streamed live classes through Zoom, a video conference platform.

“While everyone’s schedules are still shifting, we are getting good feedback from our community about when classes would be useful,” said Starr.

As Numi Yoga is adapting to moving online, Starr said that the business is not seeing the same level of income as when they were a physical location.

“Our teachers who have other income streams or are not interested in teaching online have stepped away for the time in order to give our teachers who need to teach more an opportunity,” she said.

The National Federation of Independent Business Research Center conducted a survey reporting that 92% of small employers are negatively impacted by the outbreak of COVID-19, 3% are positively impacted, and 5% of small businesses are not affected by the outbreak.

The Coronavirus Aid, Relief, and Economic Security Act, which was passed March 27, was created to support businesses and individuals. The bill includes $350 billion in job retention loans for small businesses, with loan forgiveness available for businesses that continue to pay their employees, and $250 billion in expanded unemployment insurance benefits.