If Congress doesn’t act decisively , countless small businesses will not survive COVID-19. That’s the grim truth of the situation. Small businesses counting on the SBA EIDL and PPP programs to help them through the coronavirus pandemic still wait clarity on loan forgiveness.. Guideline changes have left many participating small businesses unsure if they are in better or worse shape.
Economists and pundits have been debating and discussing the short and long-term impacts of COVID-19 on our economy. The PPP and EIDL program rollouts and implementation were plagued by problems from the start, leaving many small business owners uneasy and concerned about our future.
Small businesses need lawmakers to fulfill their promises
Nearly half of members of the National Federation of Independent Business recently surveyed said that were unable to last more than two months under the lockdown orders. Mandatory business shutdowns and quarantines have decimated their customer base and revenue.
NFIB research shows that 70% of small businesses applied the day the program opened on April 3. Within a week and a half, the PPP was nearly out of funds. Overall, many businesses found themselves shutout and in desperate need of capital.
To its credit, the Senate extended an additional $310 billion in funding. PPP funds remain available to small businesses. The hard part is finding a bank to apply because most banks will only service existing business clients.
We need more funding to sustain our employees
While small businesses account for nearly half of America’s jobs, most have small staffs. Most don’t have an army of lawyers and accountants to process their paperwork, while fewer have piles of reserves or huge lines of credit with financial institutions to weather the crisis. The majority of small businesses lack cash reserves to cover their set expenses. Small business is the backbone of the country and lawmakers need to develop a long-term plan to ensure small business’ survival.
The impact of COVID-19 is yet to be completely realized. While we are seeing its impact in myriad ways, we still do not know where it stops. As we near a 15% unemployment rate, the real problem has yet revealed itself. In a recent Facebook poll of small businesses, nearly one third do not expect to reopen post COVID-19 lockdowns. The problem on the horizon is to what jobs do the unemployed return to or apply for?
Even with the EIDL and PPP, more is needed. Congress will need to come up with some type of incubator to provide start-up or restart financing. We need a super-sized financial adrenaline shot to prevent massive job loss.
Every day we do not address this looming problem brings Main Street closer to disaster. Small business is the backbone of the country. We are dangerously close to burning down the village to save the villagers.
Our staff can help your small business navigate the post COVID-19 economic and financial. APPLY or CALL today. Our Credit Analysts can discuss our SBA and non-SBA financing options, debt restructuring and debt settlement programs with you.