Financial concerns remain top of mind for small businesses during pandemic

Nearly three months on from an initial survey, the National Defense Industrial Association has found that the main concerns small businesses had regarding the COVID-19 pandemic held largely the same the second time around.

Financial stressors including revenue expectations and access to capital remained among the top two concerns respondents cited in NDIA’s latest survey of small businesses in the defense market, released Tuesday and conducted June 10 through July 3 with 75 participants.

In NDIA’s summary of the latest findings, the industry trade group reported 71 percent of respondents faced disruptions to cash flow compared to 60 percent in the first survey. Forty-five percent said they have altered revenue expectations versus the prior reading of 45 percent, while 46 percent called out access to capital as a continuing issue compared to the first finding of 29 percent.

The Defense Department has taken steps to keep cash flowing through the industry by increasing progress payment rates, and many of its largest contractors in turn have flowed much of their benefits from that to partners further down in the supply chain.

Other items DOD has sought to address, partly through payments but also through policy, include help to keep defense industrial base employees in the sector and programs and facilities operating during the crisis.

Clear guidance from the department and workforce were both cited as items of concerns by respondents. Regarding DOD-level guidance, 7 percent of respondents to the new survey graded it as “very effective” compared to 7 percent in the initial questionnaire. But 16 percent rated the guidance as “not effective” versus the first reading of 15 percent.

Workforce was cited as an issue by 11 percent of respondents versus the 18-percent share reported in March.

Out of the 75 respondents, 29 identified their main area of defense contract work as in services. Sixteen said they focus on manufacturing and 20 concentrate on technology including research, development, testing and evaluation.

NDIA conducted both surveys at the request of the Defense Department.