PPP Loans Largely Effective for Small Businesses, Many Still Need More Financial Assistance


The NFIB Research Center released a survey updating the state of small business and financial assistance programs including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan program (EIDL).

“Small businesses have been using the PPP loan program to help keep their doors open and keep staff on payroll,” said Holly Wade, NFIB Director of Research & Policy Analysis. “However, many small businesses are telling us this won’t last forever and anticipate having to lay off employees once they’ve used their loan.”

Key findings from the survey include:

Eighty percent of NFIB members have reported applying for a PPP loan.

  • Over half (56%) of PPP borrowers have spent all their loan funds with the remaining 44% likely not far behind.

The 24-week extension for the PPP loan forgiveness period is widely popular among small businesses, with 59% of borrowers opting for the added time to use their loan.

  • Thirty-eight percent kept their original 8-week forgiveness period.

Applying for loan forgiveness is the last step in the PPP process for many, just over half (55%) of borrowers have not yet submitted their application for loan forgiveness.

  • Thirty-eight percent of borrowers are on hold to apply as their lender has told them they are not accepting applications yet. Lenders are still waiting for instructions from the SBA on how to process forgiveness applications.
  • Regarding the two forgiveness application forms, 62% of borrowers do not know yet if they will be able to take advantage of a simplified form or if they will have to fill out the longer application form.

The PPP has largely fulfilled the goal of supporting payroll to keep employees connected with their jobs. However, for many small businesses, current economic conditions will force some to adjust their employment levels after they’ve spent their loan.

  • About 22% of PPP loan borrowers have or anticipate having to lay off one more employee after using their loan (up from 14% in mid-June).

Just over one-third (34%) of small businesses have applied for an EIDL loan, generally unchanged since mid-April.

  • About 67% have been approved for an EIDL loan and 7% denied, with 26% still waiting to hear one way or another.
  • Just over half (55%) of applicants report their EIDL loan has been deposited.

Of the small businesses that have applied for a PPP loan, an EIDL, or both, 46% anticipate needing additional financial support in some form over the next 12 months.

  • Forty-seven percent of small businesses have been impacted by new changes in re-opening policies, adding to the volatile economic conditions from the pandemic.

Economic conditions are still challenging for most but less so than a month ago with about 45% of respondents reporting their current sales volume is 75% or more of pre-crisis levels (up from 28% from May).

  • Eight percent reported their current sales volumes as 1 – 25% of pre-crisis levels, 18% report sales between 26 – 50% of pre-crisis sales levels and 27% between 51- 75% of pre-crisis levels.

Some states and many cities require face coverings before entering business establishments. About 53% of small business owners require employees and/or customers to wear a face covering.

  • Forty-six percent of owners find it difficult to enforce the practice of wearing a face covering.

The biggest challenge for small business owners is being able to stock up on hand sanitizer for their business with 23% of owners reporting that it is very difficult to stock up on the product.

  • Another 36% report finding it moderately difficult to stock up on the product.
  • One-in-ten small business owners find it very difficult to stock up on face coverings and another 30% find it moderately difficult.

Getting customers back into businesses is proving to be difficult for 11% of owners with another 29% saying that it’s moderately difficult.

  • Many owners are also finding it difficult to manage employees’ and customers’ health and safety concerns with 37% finding the former and 32% finding the latter very or moderately difficult to manage.

Economic conditions are dire for about 4% of owners who say they will only be able to survive for no more than one to two months.

  • Another 19% report being able to operate for 3-6 months. About one-in-five anticipate being able to operate for 7-12 months in the current environment and 57% are less financially stressed and are able to operate for more than 12 months.

The full survey is available here.

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