As applications for Paycheck Protection Program (PPP) loans slow, the nation’s leading small-business association today released the results of a comprehensive survey of its members about how these loans are being used, the effect they’re having, and challenges owners face in maximizing loan forgiveness.
“With 1 out of 4 small businesses being ‘severely negatively impacted’ by the crisis, what we’re hearing now is that the 75% payroll rule needs to be revisited,” said Chad Heinrich, Arizona state director for NFIB, which sampled a cross-section of its 300,000 members on May 18. “We will continue to work with the Administration and Congress to clarify and expand the forgiveness provisions in the PPPL Program. If the forgiveness provisions aren’t addressed, I’m afraid many small businesses could be overly-optimistic and could end up owing lenders more than they bargained for.”
“Small businesses continue to face many challenges in operating their business in these difficult times. 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,” adds Holly Wade, NFIB Director of Research and Policy Analysis.
According to the latest numbers from the U.S. Small Business Administration, as of May 16, 72,523 Arizona businesses have been approved for PPP loans worth a total value of $8,563,928,791. The NFIB poll released today, which is not broken down by state, found 54% of its members expecting 100 percent of the loan to be forgiven after the eight-week forgiveness period. The SBA posted its loan forgiveness application May 15.
Other highlights from the poll show:
- “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.”
- “Almost one-quarter of those who have taken out one or both loans [PPP and Economic Injury Disaster Loan (EIDL)] anticipate they will need additional support and another 54% do not know yet. Only 20% of borrowers do not anticipate needing additional support.”
- “One-quarter of small business owners report that business operations are severely negatively impacted by the crisis. Thirty-three percent of small business owners report the crisis has significantly impacted their business and another 34% report a somewhat negative impact on business operation. Just 6% have not been impacted and 3% have been positively impacted.”
Click here to read the full report, which includes bar graphs on ‘When Borrowers Received PPP Loan,’ ‘Complying with PPP Loan Terms and Conditions,’ and a pie chart on ‘Percent of PPP Loan Expenses Expected to be Forgiven.’
For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today.