Small-Business Survival Capabilities and Fiscal Programs: Evidence from Oakland

Using City of Oakland data during COVID-19, we document that small-business components of survival capabilities (i.e., revenue resiliency, labor flexibility, and committed costs) vary by firm size. Nonemployer businesses rely on low-cost structures to survive. Microbusinesses (1-5 employees) depend on 14% greater revenue resiliency. Enterprises (6-50 employees) use labor flexibility to survive but face 10%-20% higher residual closure risk from committed costs. The evidence argues for size targeting of financial support programs, including committed costs and revenue-based lending programs. Supporting the capabilities mapping, we find that the Paycheck Protection Program (PPP) increased medium-run survival probability by 20.5% specifically for microbusinesses.