The economic nightmares caused by the CVD-19 epidemic are far worse than ours, but there are still major economic risks for small businesses. With Halloween here and with just two more months left in 2021, now is a good time to start small business owners.

High gas prices

In October 2021, the average price of gas increased by $ 3.38 per gallon, up from about 1.14 per gallon in October 2020. Rising gas prices affect the economy in many ways. What happens when gas prices rise? Consumer costs often fall. Higher gas prices mean that consumers spend less money in their pockets. For example, a passenger uses the same amount of gas to get to work each week, regardless of the cost. Naturally, when people pay more for the same fuel, they spend less. As fears of inflation increase, some people may have to spend less on other goods and services, which can have a negative impact on small businesses.

At the macro level, rising oil prices are generally expected to increase inflation and slow economic growth. High transportation costs increase costs for distribution. As petrol prices rise, small businesses, including operating companies and shipping companies, will suffer, and by 2021, gas prices will rise sharply. In addition, small companies with vendors and suppliers who regularly supply the goods or services necessary for daily work increase the price of goods sold.

Supply chain disruptions

As a New York Times Many products are short of “how the supply chain is broken and why it will not be fixed soon,” he said. Discontinuation will return to the early stages of the epidemic. Most of the world’s producers are based in China, Taiwan, and Korea, and workers have suffered from a slowdown in production or work. Similarly, shipping companies have discontinued their programs in anticipation of a global decline in demand. You are wrong.

When Americans worked from home or collected generous unemployment benefits, they bought online registration numbers. Small businesses that are not prepared for these developments and cannot afford to order and deliver online have lost ground to online retailers such as Amazon. The problem is compounded by the shortage of transportation and the fact that millions of consumer goods are stored outside US ports in California. Retailers cannot make money if they do not have the goods to sell.

Unfortunately, there is no way to predict how long the supply chain will last. Of course, it could last until next year… or maybe longer.

Staff shortage

Before the outbreak, there was a shortage of workers. The economy was either fully operational or close to most of Trump’s presidents. Lack of energy has worsened. Many companies, especially restaurants, were closed because they could not find employees. Generous Unemployment Benefits It was encouraging to stay home when you could earn that much money (and sometimes more money).

The free time in their hands gives people many opportunities to evaluate their lives and think about whether they are working hard or not. Some workers in the economy are re-evaluating their work and living conditions as well as their financial situation. As a result, it is now more difficult than ever to find low-income residents. This is a scary prospect for many small businesses.

According to economist Lawrence Sumers, “Biden’s mismanagement of unemployment benefits has created a huge shortage of manpower:

To solve this problem, small business owners have no choice but to pay higher salaries to attract workers. This gives entrepreneurs a choice, to increase the cost of labor, to increase sales, or to reduce the risk of losing sales or eating out the extra costs themselves.

Challenges of Capital Protection

Capital is essential for the growth of small businesses. Now that the PPP is over, business owners will no longer be able to protect their “forgiven loans” that do not need to be repaid. The acceptance of microfinance loans has fallen on large banks. In September, 14% of loan applications were approved by large banks. This represents a 50% reduction from major lending institutions before the epidemic. Last month, small banks approved 19.5% of their loans, far from February 2020, if more than half of them were approved.

Matching PPP is over, small business should look for other sources of funding.

Fortunately for small businesses, SBA is looking to expand its other loan programs. In addition, small banks are becoming more active in small business lending as they enable online loan applications and digital processing in collaboration with Fintech companies. Technology continues to be a major factor in many sectors of the economy, especially in small business finance. Technological advances enable transactions to be conducted quickly, efficiently and safely, enabling both borrowers and small business lenders.

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