‘Optimism index’ a misnomer for NJ small business outlook right now
TRENTON — In the largest one-month decline in its history, the National Federation of Independent Business' Small Business Optimism Index fell 8.1 points in March, as stock market indices lost 22% of their value over the month, and around 10 million people filed for unemployment benefits nationwide in a two-week period.
Eileen Kean, state director of the NFIB in New Jersey, stated the obvious: This new information is very sad and there is no good news in sight.
She said there had been a glimmer of hope last week, with applications for a federal Paycheck Protection Program opening up on April 3. But some banks that small businesses looked to as primary lenders in the past are either not giving out loans at this time, or are trying to involve a third party in the loan process — and Kean said those delays were crucially crunching business owners' timelines.
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"Last week, or in March, business owners felt that they could keep themselves going until June," she said, specifically addressing New Jersey.
But because the loan process is "random," as Kean put it, that imaginary deadline is looming closer for independent shops in the Garden State.
"That money is realistically two weeks away before it's going to get in their pocket, and at the same time, some businesses are trying to hold on to their employees," she said.
The NFIB's March survey indicated that the small business sector, in New Jersey and elsewhere, is preparing for economic disruptions of six months or more. Kean said that long-range view is forcing some unconventional questions to be asked.
"Should we mandate that mortgages be held until this is over? We've got to continue working with our lenders to come up with alternatives to save our businesses," she said.
Sales volumes stayed strong in the NFIB survey, at least for the month of March, but expectations for sales growth were understandably way down. Still, much can change in a month's time.
"Let us all hope that our next business trend report comes out and the tide has turned, and that we have a more optimistic report coming out next month," Kean said.
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