A new report from Biz2Credit reveals that among small businesses that have taken out Paycheck Protection Program (PPP) loans, those in finance and retail have recovered well from the effects of the pandemic.
According to the Biz2Credit recovery ranking for 2021, companies engaged in finance, retail and real estate are leading the recovery with a recovery rate above the 50 percentile mark. These businesses have seen the strongest recovery force after COVID-19 closures. Because financial services and insurance companies had a high demand for expansion capital, but a low level of distress. Even as these companies rebound financially, the challenges remain with the supply chain rather than consumer demand.
Which small businesses have recovered the best after getting a PPP loan?
This ranking matrix measures the resilience of companies in different sectors based on their ability to bounce back from the economic shock of the pandemic.
Other findings of the report include:
- In terms of recovery, wholesale trade (49%), manufacturing (48%) and construction (48%) are the top three.
- In terms of businesses that continue to need additional access to credit and are showing resilience, these include finance and insurance; retail; administrative and support services, and waste management and remediation services.
- Sectors that have been relatively less affected by the pandemic, such as real estate, rental and leasing, anticipate a recovery with weak demand for credit.
- Firms that seek better access to credit but report low recovery expectations include those in information technology (IT); professional and technical services; accommodation and catering services; health care; wholesale and manufacturing.
- Businesses that have been severely affected by the pandemic and are experiencing a slow recovery include transportation and warehousing; educational services; and the arts, entertainment and recreation.
More targeted support is needed for recovery
One of the main findings of the report is that the recovery of small businesses has been uneven across sectors. And it suggests targeted opportunities for additional private and public support for small businesses. In an effort to help small businesses recover from the pandemic, the US government had put in place relief programs. This includes the Small Business Administration’s Paycheck Protection Program (PPP) for millions of small businesses across the country.
Accommodation and food services businesses had the highest average approval rate for all funding requests at 57%, followed by retail (55%) and healthcare (54%).
How are businesses doing?
Among the companies with the highest average revenue in 2020, information technology leads with an average revenue of over $ 1.5 million. Next come wholesale trade ($ 1.3 million), manufacturing ($ 1.1 million), retail trade ($ 750,000), accommodation and food services ($ 626,000) and healthcare. health and social assistance ($ 612,000).
For companies with the highest average credit score, information technology scored an average score of 636, followed by real estate (633), finance and insurance (624), professional and technical (623) and health care (619).
The report also analyzed how often companies from different industries worked with a CPA firm on funding requests. Other services (20.8%), transportation and warehousing (12.8%) and professional services (11.3%) are among the top companies working with CPA firms.