Small businesses that are recovering strongly and speedily from COVID-19 pandemic losses have a key factor in common — they’re digitally savvy. Small business funding platform Biz2Credit conducted a study to assess the degree of pandemic recovery across industries and found that, the extent to which small companies embraced digital technology or were already digitally advanced aided their post-pandemic recovery.
Delve deeper
Biz2Credit Recovery Ranking for 2021 lists industries in order of their ability to bounce back from the disruptions caused by the COVID-19 pandemic. That is, whether they are in a stronger financial position or are struggling to stay afloat in the post-pandemic world.
Methodology
- The study analyzed the financials of more than 200,000 small businesses that submitted funding requests through Biz2Credit’s online funding platform.
- The ranking weighed on the number of approved PPP loans of a company, along with its demand for capital growth.
Note
: The study considers small businesses with fewer than 250 employees and less than $10 million in annual revenues.
Key findings
- While sectors such as educational services, information technology, arts, entertainment and recreation registered slow recovery out of the pandemic, finance and insurance industries rebound strongly in 2021, followed by retail trade, real estate and wholesale trade.
- IT businesses boomed with their average revenue and owners’ credit scores rising above other businesses.
- Businesses in the financial services and insurance sectors exhibited high demand for growth capital and low levels of distress. In fact, financial services companies were found to be the most resilient in recovering from pandemic-induced disruptions.
- The arts and hospitality industries faced a complete shutdown when the economy suddenly came to a grinding halt in 2020.
- The transportation industry witnessed the highest number of recent startups.
Though small businesses across industries were affected by the effects of the pandemic, the study shows that some industries fared better than others. And it is likely that companies that lagged were just not as digitally savvy.
Takeaway
Businesses that have some catching up to do should consider incorporating technology solutions and increasing digital offerings to close any gaps, while also creating business opportunities and keeping the competition at bay.
