Question

How do you think small businesses will be affected in America & Worldwide once the tragic pandemic of CV-19 is over? Provide examples, and justify why both small and big businesses alike received a $2 trillion dollar bailout from the government this week. Was it fair? Is the travel industry dead?

Answer 1

         Covid-19 has impacted lives not only at individual and community levels but also at national and international levels. No industry has been left untouched by its impact. Quarantine and social distancing has contributed immensely in bringing down the revenues of not only micro, small and medium enterprises but also large companies.

          Small businesses are facing problems currently and these businesses won’t be able to get rid of their problems soon. Even after the pandemic is over, there would be cash crunch. Many small businesses have even removed their employees because of the inability to pay their wages and salaries. In some cases, if the employees are not removed, they have been asked to wait for salaries as the businesses don’t have enough cash for remunerating them.

          The reason behind the downfall of these small businesses is that most of them depend on footfalls for their survival. Not many of them operate on internet and hence, they are not getting enough customers to meet their costs. Among small businesses, the most severely affected ones are those with seasonal commodities. They remain shut for a few months and do some alternate work but now they are facing the problems too.

           The real disposable income of the customers is being used buy them to buy essential items like food. People have stopped spending on many other things and are only focusing on stocking up their kitchens because the lockdown in several countries is subject to the improvement in Covid-19 cases. Even when this pandemic is over, there will be difficulty for small businesses as the demand for their products will go up very slowly.

          The small businesses are even contacting banks for loans which do carry rate of interest. When situation is normalized, another task for businesses would be to pay off their debt. The governments in many countries have voluntarily decided to extend loans to small businessmen so that their work cycle doesn’t get affected.

          Both small and big businesses alike received $ 2 trillion dollar bailout from the government. The reason behind this is that small businesses need this financial aid for carrying out critical activities like payment of rent, keeping employees on payroll, miscellaneous expenses, etc. It is a way to ease the strain on small businesses in the US. This amount also covers certain short-term operating costs that can’t be ignored and have to be paid.   

          The package relief for big businesses was formulated with the aim of stabilizing the big businesses that are the most affected by the pandemic. The most important of them is Airlines industry. This package covers both cargo as well as commercial airlines. Airlines are like a lifeline of any economy and their well-being is considered of topmost priority because they not only transport goods but also people.

         Coming to tourism industry, it is affected deeply by this pandemic because many countries have imposed travel restrictions on tourists. A recovery plan needs to be formulated for this industry to recover as soon as possible. The reason being once this pandemic gets over, people would resume to their normal life and go for vacations. International tourists are a source of foreign exchange for any country and this helps in booming up the economy as well. Travel industry would definitely plan an important role in normalizing the economic conditions of any country.