Small business owners across America are less confident the country is moving in the right direction and are increasingly concerned about the impact that rising COVID-19 infection rates will have on their businesses, according to a national survey released Tuesday by Goldman Sachs 10,000 Small Business Voices.

Only 38% of respondents in the new nationwide survey believe the country is moving in the right direction, representing a 29-point decline from June. Additionally, 74% of small business owners surveyed expressed concern about the impact of rising COVID-19 infection rates on their businesses.

The data is based on a survey of 1,145 “Goldman Sachs 10,000 Small Businesses” participants conducted by Babson College and David Binder Research from Aug. 30 through Sept. 1. The survey included small business owners from 48 states, 55% of whom were women.

Goldman Sachs has offered its 10,000 Small Businesses program in Iowa since 2019 in partnership with the state’s 15 community colleges and regional and local economic development agencies. The program is based on a curriculum developed by Babson College in Wellesley, Mass.  

Jessica Johnson-Cope, a small business owner in New York who currently chairs the Goldman Sachs 10,000 Small Businesses Voices National Leadership Council, said that after signs of optimism just weeks ago, the new survey data is troubling. “The data clearly shows how the current surge in COVID-19 cases is worsening existing challenges in the labor market, accelerating inflationary pressures and applying pressure to those already facing challenges,” she said in a statement.  

Finding workers is a top concern for many small businesses; 73% of small business owners are currently hiring full-time or part-time employees, yet 87% of those hiring are finding it difficult to recruit qualified candidates for open positions. Additionally, 80% said that the difficulty in hiring is hurting their bottom line.

RaeLynn Whitfield, co-owner of Whitfield’s Lawn & Garden in Des Moines, said workforce is the biggest concern for her family-owned company, a Black-owned business nearing its 20th year of operations. While the company’s head count has gone up and down over the years, it has had steady growth in the past five years and is currently at 12 employees. As she travels around the metro, it’s clear that a lot of businesses are seeking more workers, Whitfield said.

“The labor side is not exactly ideal right now, but it’s functional,” she said. “We could definitely use more laborers.”

The family-owned business plans to seek bank financing for the first time in the next year for a significant expansion to double its head count, a move the owners hope will double both revenues and profits. Whitfield graduated from the Goldman Sachs 10,000 Small Businesses program in March, an experience she said was the most valuable one she has had as a business owner.

The Whitfields are among a majority of Black-owned small business owners — 54% — that in the survey said they expect to take out a loan or line of credit this fall or winter. In comparison, fewer non-Black business owners — 29% — shared the same expected need.

Only 20% of Black-owned small businesses surveyed are very confident they would be able to access capital if it was needed. Overall, fewer than 1 in 3 — 31% of companies — said they were very confident they will be able to access capital if they need it.

Whitfield said  she and the co-owners — her dad and two younger brothers — have been able to easily finance equipment and vehicles with personal loans because they all have good credit, but a six-figure commercial loan is new territory. “I don’t see any difficulties accessing it,” she said. “I’m not sure how it will play out, but I’m very hopeful.”

For small business owners across the country, Inflation is also a big concern, with 84% of respondents stating they have seen an increase in their operating costs. In a sign that inflation may still be building, 81% of respondents said inflationary pressures have increased since June, and 74% said their business’ financial health has been negatively affected by inflation.

An overwhelming number of respondents, 96%, agreed that state and local governments should prioritize federal COVID-19 relief funds to provide small businesses access to capital. Also, 83% said they support the executive order enacted by President Joe Biden in July that directed the federal government to promote greater procurement competition and increase opportunities for small businesses.

A summary of the survey results can be found on the Goldman Sachs website.