Most Japan small firms say they can survive only if pandemic ends soon

Nearly 60 percent of small and midsize companies say they will be able to survive the COVID-19 outbreak and related business shutdowns if the pandemic ends in the next few months, according to a survey released Sunday by an insurance company.

In a survey conducted in late March by NN Life Insurance Co., 20.3 percent said they would be able to weather the impact of the virus if the spread was stamped out by the end of this month.

Some said their business would survive if the outbreak finished by the end of May, at 16.6 percent, and by the end of June, at 15.5 percent, while 7.1 percent said the virus spread would have needed to stop by the end of March in order for them to survive.

The survey found 24.2 percent were confident their business would not be affected even if the virus continued to spread into 2021 and beyond.

The survey was conducted before Prime Minister Shinzo Abe declared a state of emergency this month for Tokyo and six other prefectures, which was then extended nationwide. Over 14,000 cases of infection with the new coronavirus that causes COVID-19 have been confirmed in the nation, including about 700 linked to the Diamond Princess cruise ship that was quarantined near Tokyo in February. More than 380 infected people have died.

The emergency declaration, currently effective until May 6, prompted prefectural governors to make, or plan to make, requests for residents to avoid nonessential outings and for businesses to suspend operations. It is unclear whether the declaration will be lifted on that day.

Such requests and travel restrictions took a heavy toll on a broad range of businesses, including the restaurant and tourism sectors, raising concerns over a cash crunch in small companies.

According to the survey, 25.2 percent said they were in urgent need of cash.

To mitigate the impact of the virus on their businesses, the government has launched zero-interest loans for small and midsize companies.

The Cabinet also approved an emergency economic package including subsidies of up to ¥2 million ($18,600) for small firms seeing a sharp revenue drop due to the epidemic.

The online poll was conducted between March 27 and March 31 with responses from 7,228 people who manage companies with 300 employees or less.