Small businesses owned by older entrepreneurs—those over the age of 45—have been particularly affected by the COVID-19 pandemic, compared to those owned by younger entrepreneurs, according to a new survey from the Federal Reserve Bank of New York and AARP published today. The number of firms with older owners saw a 24% drop between January 2020 and January 2021, compared to a 16% drop among those with younger entrepreneurs, the survey found.
When asked about the financial toll of the pandemic, 62% older business owners said they had not drawn a salary or had taken a pay cut, while 50% said they dipped into personal funds to cover business expenses. About a quarter expressed concern about their personal credit score or the loss of personal assets due to late payments.
Looking ahead, older entrepreneurs remain concerned about revenues in 2021. Fifty-nine percent said they are worried about weakened demand for products and services, while 52% said they fear additional government-mandated restrictions or closures and 37% said they were concerned about supply chain disruptions. Just under a third of respondents—31%—expressed concern about limited credit availability. Older business owners were mixed about when their sales would return to pre-pandemic levels, with 41% expecting a return to more normal conditions in the second half of 2021, while 29% don’t expect conditions to normalize until 2022 or beyond.
