Business is booming.

After Enduring a Pandemic, Small Businesses Face New Worries

Operations stemming from the pandemic had benefits: no business practices to run on, or legacy costs like office rent. Many businesses are built around external business environments and hygienic precautions. But they were no more ready than existing companies for rising inflation and rising interest rates. And, unlike incumbents, they didn’t have access to most of the utilities offered by the federal government.

Irina Sirotkina sold her stake in a construction company early in the pandemic, as contracts for new hotels and office buildings dried up. She used that money to… bakery in October at Battle Ground, Wash. Although the orders for her cakes and pies are pouring in, customers have been able to withstand even the smallest price increases. The cost of her main ingredients – eggs, butter, milk and flour – have climbed 13 to 49 percent since she first lit the kilns. So far, profits have been elusive, potential customers are cutting back on car trips to the city, and no new Paycheck Protection Program is in sight.

“We used all our resources to make it because we didn’t qualify for the first, second or third round” of that program, Ms Sirotkina said. “But how far do we have to get before we get help?”

New businesses and businesses run by people of color especially struggle to get bank loans, so they are often driven to online lenders that charge high interest rates for short-term financing. Last year Congress hoped to ease access to credit assigned $10 billion to be funneled through lenders for the express purpose of reaching underserved entrepreneurs; the money is still trickling out.

Still, signs of weakness appear. Gusto, a payroll and benefits provider serving 200,000 small businesses, has seen a revival in layoffs among its users. That’s important, said the company’s economist Luke Pardue, because smaller employers typically don’t like to let people go.

“For a small business, 10 percent of the workforce could be the HR department,” said Dr. sorry. “Each employee really has a specialized interest that may not be present in a larger company, so every swing you see makes more sense.”