One-fourth of small business owners say economy won’t return to normal until 2022 or later
The NFIB Research Center released a survey on the small business loan programs. Small business owners were asked about the Paycheck Protection Program and the Economic Injury Disaster Loan on April 17, the day after the programs ran out of money. About 20% of submitted applications have been fully processed with funds deposited in the borrower’s account, but 80% of respondents said they are still waiting, and many do not know where they are in the application process.
Most small business owners believe it will take beyond 2020 to recover from the economic impact of COVID-19, with only one-third of small business owners believing their community will get back to a normal level of economic activity by the end of the year. A quarter of owners believe it will not be until 2022 or later before the economy returns to normal.
In Juneau, Debbie White spends a lot of time pacing back and forth on her deck and around the house. There’s little to no reason to leave her house. Thanks to Alaska’s stay at home orders, she’s shown just a few homes in the past month – virtually – and it didn’t go well. Business at Debbie’s small business, Southeast Alaska Real Estate, has come to a halt.
“Who is going to put money down on a home they haven’t seen in person? You wouldn’t buy a $25,000 car without test driving it first, so why would you buy a $400,000 home without setting foot inside? It’s not going to happen!”
Debbie White poses with her team at South East Alaska Real Estate. In the past month, she’s only had one virtual showing, which she called a disaster.
White was one of the first in Alaska to apply for the Paycheck Protection Program, yet she still hadn’t heard anything about her application when the money for the program ran out last week.
“When I found out that big companies like Shake Shack, Ruth’s Chris Steak House, companies that aren’t small businesses, got the PPP money, I was really disappointed. Big corporations shouldn’t qualify for the PPP! Congress needs to focus on true small businesses – those with 50 or fewer employees. Small businesses like that, like mine, don’t have the same level of resources that bigger companies do. We don’t have the ability to weather this crisis like they do. Congress should be protecting businesses that truly are small,” said White.
“Alaskan small businesses continue to reel from the COVID-19 economic shutdown and owners are frustrated by slow pace of EIDL and PPP loan disbursement. Many small businesses that have applied are unsure when money will hit their accounts or even where they are in the process. Lenders and the SBA need to do a better job at getting money into small business accounts and communicating with applicants. Uncertainty about the future is mounting as many small business owners expect the impacts of this shutdown to last for more than a year. Lenders and the SBA need to do their part and communicate with applicants and move money rapidly where its needed most: in the hands of struggling small businesses,” said Thor Stacey, NFIB State Director in Alaska.
Key Findings of the Survey Include:
About three-quarters of small business owners (almost all employer businesses) have submitted an application for a PPP loan as of April 17.
· About one-in-five (20%) of submitted applications have been fully processed with funds deposited in the borrower’s account.
· Nearly 80% are still waiting, many not knowing where they are in the process.
About 40% of small business owners successfully submitted an application for an EIDL through the SBA website.
· Among those who submitted an application, most (77%) requested the emergency grant of up to $10,000.
· Of those who requested the EIDL emergency grant, about 10% have received the funds.
· Essentially, all of the EIDL applicants (99%) have yet to receive the loan.
Most small business owners believe it will take beyond 2020 and into the years following to get back to normal economic activity.
· About one-third of small business owners believe their community will be back to a normal level of economic activity by the end of the year.
· Just under 40% believe more normal levels of economic activity will return in 2021.
· A quarter of owners believe it will not be until 2022 or later before the economy returns to normal.
The full survey is available here.