Survey: Most Small Business Received PPP Loans
BATON ROUGE – The NFIB Research Center released a survey on the status of the small business loan programs. Among NFIB members, 80% applied for a Paycheck Protection Program loan and almost 90% have received the loan. Most of the loans were deposited between mid-April and mid-May.
“Small businesses continue to face many challenges in operating their business in these difficult times,” said Holly Wade, NFIB Director of Research & Policy Analysis. “Congress and the Administration have the authority to further lighten the burden for many of their immediate concerns, especially in offering more flexibility for PPP loans.”
State-specific data isn’t available, but NFIB State Director Dawn Starns said, “The COVID-19 shutdown is having an overwhelming impact on our small business members. This is why we’re encouraging the state Legislature to use $200 million of the $1.8 billion Louisiana received under the federal CARES Act to help small businesses recover and people get back to work.”
Key findings from the NFIB survey include:
The majority of small businesses expect their expenses to be forgiven.
- Over half (54%) of owners with a PPP loan are expecting all of their expenses to be forgiven.
- Twenty-seven percent of borrowers expect at least 75% or more of loan expenses to be forgiven.
- Very few PPP borrowers are interested in using the funds as low-interest, two-year loans.
Complying with the PPP loan and loan forgiveness terms and conditions is challenging for small businesses.
- Twelve percent of borrowers report that spending the PPP loan within an 8-week forgiveness period is very difficult and 34% find the requirement somewhat difficult.
- Almost one-in-five borrowers find the forgiveness requirement that the borrower’s employee headcount match the pre-crisis employee headcount very difficult to reach since many businesses have already laid-off workers due to slower sales or suspended business activity.
- Another 28% find it somewhat difficult to maintain or return to their pre-crisis workforce level.
- The 75% payroll rule is difficult for 38% of small business borrowers to manage as 14% find it very difficult and 24% find it somewhat difficult
Owners have questions about how to spend the funds.
- Nearly three-fourths of small business borrowers find the terms and conditions of the PPP loan difficult to understand with 22% finding them very difficult.
Additional financial support over the next 12 months may be needed for many small business owners
- Almost one-quarter of those who have taken out one or both loans anticipate that they will need additional support and another 54% do not know yet. Only 20% of borrowers do not anticipate needing additional support.
Some small business owners find themselves competing with the unemployment benefits offered through the CARES Act.
- Eighteen percent of small business owners have had an employee decline a job offer because they wanted to stay on UI.
- Another 6% of owners have increased salaries to encourage a worker to come back to their job.
- Five percent of small business owners said that an employee has remained in their job because they also received supplemental UI benefits with reduced hours.