Credit Access and Financial Resilience of Local Small Businesses During the COVID-19 Pandemic
Advisor: Rob Biemesderfer
Internship Location: Small Business Development Center
This project will study how disruptions from a systemic event (COVID-19) interacted with financial fragility (credit access, liquidity, and cash-flow management) to determine which small local businesses survived, adapted, or closed, across sectors. Rather than analyzing all forms of systemic risk for large corporations, this research focuses on financial contagion and liquidity shocks during COVID-19, on local businesses in a county, how temporary freezes in demand and credit cascaded through local business networks.
Project Blog
Week 0: Getting Started---Small Business Risk Analysis
In the past, my family owned a small business that faced enormous difficulties during systematic collapses, such as COVID, and the 2008 Financial Crisis. Many other small businesses have faced immense hardships during the past 5 years due to various economic reasons and political disturbances. With this research, I hope to analyze risk factors present for local businesses, especially for the DC area, to provide a risk-factor guidebook for local businesses to help them avoid collapses in any future crises.
In the following 12 weeks, I will be conducting a research on small business risk analyses in the local area. This project comprises of 3 parts: 1) collecting responses of risk-prone areas for local businesses, 2) analyzing national data, and 3) risk responses to past disastrous situations such as COVID.
My plan for the next 12 weeks are as following:
Weeks 1-2: Preparational works. These include literature review and final confirmation of internships.
Weeks 3-10: Internship and research: These include writing the research as well as interning at a governmental agency to serve and learn from local small businesses.
Weeks 11-12: Prepare for showcase. These works include finalizing the research from reviews, and preparing for the final presentation for the showcase in the end of May.
Currently, I am finalizing the location and duration of my internship. As of now, the research is scheduled to be conducted under instructions of a professor in George Washington University, and the internship in a federal small business service agency.
Week 1: Revisiting Proposal and Finalizing Internship
In the past week, I focused on preparation work for the project. In the past 4 days, after Senior Sendoff, I further discussed details of the internship with the site manager of the Small Business Development Center. They explained that they offer start-up advice for micro-businesses, especially in marketing. They are supportive of my research, but would like to confirm if I believe that this opportunity is the best for me. I do believe that interacting with micro-businesses can serve as a way to learn about what small businesses lack and contribute to my project. The internship is scheduled to start in around two weeks, when I return from a scholarship program.
I also spent the week revisiting the literature I analyzed when producing the initial proposal, focusing on commonalities of past economic crises on small businesses. I summarized two initial assumptions:
Most economic crises are first experienced by large corporations, and trickle down to small businesses. A World Bank research in 2014 by Hallegatte defines resilience as an economy’s ability to resist, absorb, and recover from shocks that exceed local coping capacity. Larger global/national businesses are naturally prone to more small risks, while having more resilience by operating in a bigger economic system. A result of this research I hope to produce would be measuring the extent of resilience in this local economy; or in other words, what kind of disasters would overcome local coping capacity.
Small businesses do not have enough risk mitigation capabilities. In fact, the Federal Reserve’s Small Business Credit Survey finds that more than forty percent of firms report that they cannot cover operating expenses for more than one or two months if revenue falls. A metric I will be measuring for the local area is the extent of risk of which small businesses can take.
In the following weeks, I will begin qualitative analyses of these metrics based on field work and discussions with local small businesses through research channels or through internship sites.
Week 3: Internship and Literature Review
Last week, I was not able to produce a blog as I was traveling for a scholarship opportunity, then sick.
In the past 4 days however, I started my internship under the Virginia Small Business Development Center. I focused on contributing to supporting work as well as taking notes during meetings and planning strategies for micro-businesses. A lot of micro-businesses are online, such as consulting as well. Therefore, my internship is hybrid: I mostly work on background work online and pop into meetings, and contribute to weekly workshops in-person.
Since I just started this week, I am not going to write about the exact work I did. Please read my next post to find out. I focused on making progress towards my literature review in the last week, reading more literature about micro-businesses, which employ only 1-10 employees compared to 10-30 in small-businesses. More people are starting to create micro-businesses as a part-time project or job, due to the increased accessibility of online platforms and tools. SBDC also focuses a lot of its consulting on micro-businesses. Therefore, I increased the weight of micro-businesses literatures relative to small-businesses in my study.
Micro-businesses are easier to start, often requiring less monetary or labor investments, as most are started as a part-time project to evolve to a full-time business. And they take up a huge percent of new start-ups. In my next report, I will explain more about the current state of new micro-businesses.
Week 4: Methodology and Rubric
The past week has been stressful for me with 15 college decisions coming between Wednesday and Friday. If you are reading this message as a high-school student, my honest advice is: do not apply to so many!
I still made some significant progress on this project. Over the past few days, I reconsidered the methodology section of the project to make the design feasible to accomplish in a month. Previously, I employed a mixed-method design, focusing on interviews and surveys to collect detailed quantitative primary data. This design was questioned during the initial proposal, mainly concerning if small businesses would be willing to disclose confidential information. Well, now I know that as an intern in the SBDC, I simply cannot record some confidential information.
My research is therefore going to be more qualitatively focused. I will use a systemized and codified template to record the characteristics of small-businesses consulting with us, and analyze the similarities in these records to determine the common threats these businesses face.
My internship has been great. I was able to meet with a lot of new start-up micro-businesses and listen to their stories, though I must keep the details confidential.
Week 6: Data Analyses and Workshops
In the past week, I focused on analyzing data that are currently available and coming up with a framework to systematically categorize and summarize future data to be analyzed. I observed 2-3 counseling sessions per day, and recorded what each business consulted for. I have yet to plot data, nor have I used code to systematically analyze my observations, but on the top of my mind I remember that most businesses' problems are focused on funding and customer acquisition---specifically for non-physical, service-oriented businesses.
Funding: Mostly, at the end of the day, when you are going to start a business, you are going to the bank or a government-subsidized source of funding, like SBA loans. These loans can be extremely helpful, covering on average half of what one needs to acquire or start a business. However, a crucial barrier to these loan application is proving your expertise or advantage in the field. Why are you the one to run the business? The other half of the expense can be challenging as well.
Customer education and acquision: If you are selling a service, why do I need it? And how do I get that information? A small business might be trying to grab regional customers in an over-saturated national market filled with other companies that have much better SEO. Reaching an educated customer that wants to pick your service is important.
These are the starting points I have for my analyses. I will add to these categories more next week.
Next week, I will focus on systematically analyzing the data. I am also currently in the process of getting permission from my supervisor to utilize past session notes from the database. To protect the privacy of the businesses, I have anonymized these data before publishing the research, or even discussing with my family or school supervisor.
During my internship, I have had a lot of fun shadowing these sessions as well as workshops!
Week 7: Internship and Data Collection
In the past week, I focused on my internship. I attended workshops and local events, as well as supporting backend work including creating marketing materials and listing events.
Regarding the research, I am facing barriers in collecting data, specifically through the way described last week. My counselor has concerns that it may violate the confidentiality of the clients, and even the counselors. However, I am able to read annual data reports for each center that consists of more general data such as bar graphs of what types of businesses are counselling, or why are the clients here, that do not (hopefully) violate the confidentiallity. I will be reading through reports for the remaining of the week to find which would suite this project, and then confirm with my counselor if any data can be disclosed. I am confident that this kind of secondary data analyses would not violate the confidentiality agreement, but I still need approval from my supervisor for specific reports.
If I am granted access to these reports, I will be analyzing 2025 data in detail, and compare it to 5, or 10 years ago, in different economic environments, in conjunction with other governmental reports. The final product will be an owner concern profile to demonstrate how business owners perceive and prioritize threat, and subsequent support suggestions to local organizations.
Week 8: Finishing the Project Draft
In the past week, I made some major progress. I finished the draft of the essay, coming out to a staggering 9,500 word count. Therefore, my main objective next week, along with the presentation, is to cut it down.
I did get access to Mason SBDC data, but I did not put any specific names, nor demographics, on the paper as that would be confidential. Instead, I focused on exploring the different categories of assistance needed by prospective or current small business owners. Here are a sneak peek of important findings below.
Owner concern in the Mason SBDC data stayed centered on the same core issues from 2020 to 2025, namely startup planning, financing, marketing, accounting, cash flow, and management. These suggest persistent structural pressure rather than random short-term fluctuation.
The heaviest request burden came in 2024 and decreased in 2025, rather than in 2020, which shows that local small-business strain built during the recovery period instead of ending with the first pandemic shock. There is a steady increase in the number of requests starting in 2021 that is hard to explain when there is a big drop in 2025.
Virginia’s labor market remained tighter than the national market across the period as indicated by JOLTS, and that tightness appears to have fed not only hiring problems but also broader concerns in management, technology use, customer retention, and cash-flow stability.
The local concern profile reflects a service-heavy NOVA business mix, with strong presence in professional services, retail, health care, education, information, and other small service fields that are especially exposed to labor mismatch, uneven demand, and thin operating margins.
Current support systems fit startup guidance and financing access better than they fit continuity problems like sales, legal friction, and day-to-day operating strain, which means the main policy gap is not the absence of help but weaker support for firms once they are already open. And operational counselling is the second-most required after financing, if general start-up assistance is ignored.
Internship has been great as always. It is coming to an end soon in 2 weeks, and it has been very fruitful for me by providing me the opportunity to hear from real business owners their problems, or ideas.
Week 9: Cleaning Up the Project
In the past week, I focused on cutting down my project. It went down from a staggering 9,500 words to a still staggering 7,000 words. That is a big improvement. I mainly cut down in the repetition of "concern profiles" and detailed explanations. Most details are still in tact, and I could not simply summarize them, unfortunately. I will be discussing details with my counselor tomorrow.
With some more adjustments after meeting with my couselor tomorrow, I will edit it further and submit it to prepare for my presentation, in which you will get to hear about my findings.
Another important thing I focused on this week was my internship. There is not much to write about. My schedule stays similar for the week. Usually, I meet with my advisor on Monday and do some backend work; Tuesday complete some marketing objectives; Wednesday or Thursday, facilitate workshops and shadow 1-on-1 counseling sessions; Friday report back and do some more tasks. Another way to look at my dull reporting is that I am more involved and abled to do the internship. I hope I was able to share specific stories but unfortunately that is not the case.
Week 10: Preparing for the Presentation
This week concludes my internship! I found the internship very rewarding and intuitive. I learned a lot of new things about small businesses, and encountered many interesting stories I think I can share with you all. I am looking forward to sharing my internship journey with you all on the showcase coming up.
In the past week, I focused on preparing for the senior showcase so I can present the most interesting parts of my internship and my finding from the research. I am working steadily towards a presentation, which I will rehearse next week.
My main finding of the project is that the current resources and problems small businesses face are mismatched, in that not many supports are provided to sustain a business. Rather, they focus on monetary support to start a venture. I will explain this finding in detail in the showcase. If you are interested, please join me at the presentation!