Half applied through small/community bank; Nearly all owners concerned about increased liability claims.
The NFIB Research Center released a survey on the small business loan programs. Small business owners were asked about the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) programs. The PPP is very popular among small businesses, with 77% of owners (NFIB members) reporting they have successfully submitted an application.
“We’re finally seeing some good news for our small business owners. More than half of our members who applied for the PPP now have the funds in the bank account. However, there’s still a lot of confusion out there,” said Matt Everson, NFIB State Director in Iowa. “The clock is ticking: small business owners have just eight weeks to spend their funds in order for the loan to be forgivable, yet many are worried that’s not enough time and even more have questions about what they can use the funds for. Small businesses are in need of support right now to deal with not only questions of funding, but how to get customers back safely and at what liability to their business.”
In Urbandale, Mary Ann Kennedy sees optimism in her small business’ future for the first time in weeks. Her marketing firm, Primary Source, was hit hard by the coronavirus crisis. Sales plummeted when business events were canceled and some of her customers were forced to shut their doors. Scared by lack of revenue, Kennedy applied for the Paycheck Protection Program.
Kennedy poses with some of her employees at her small business, Primary Source.
Kennedy is now able to cover rent, utilities and payroll for her six employees for the next two months. It’s the band aid she was looking for to keep her 35-year old company afloat until hopefully, business picks back up. Kennedy believes Primary Source’s promotional products and direct mail marketing gifts will be more in demand in the coming months and that her company will hopefully be in a place to recover by the end of the year.
Key findings of the survey include:
The majority of small businesses have applied for a PPP loan.
- About 84% of applications were submitted before April 17, when the program was suspended for funding, and 16% of applications were submitted after April 17.
- Half of applicants submitted their application through a small or local bank, 18% submitted through a medium-size bank, 14% submitted through a large bank, and 4% through a financial technology (FinTech) lender.
Over half of owners have received their PPP loan.
- Forty percent of applicants are still waiting, but just under half of those waiting (45%) have received notice that their loan is approved.
- Just over half (55%) of applicants who have not received a loan are still waiting to hear from their financial institution about their loan status.
Under half of respondents applied for an EIDL.
- About 40% of respondents submitted a loan application for an EIDL and 60% of them applied before April 1.
- The vast majority (75%) of EIDL applicants also requested the EIDL Emergency Grant.
Owners are most concerned with getting customers back to their business.
- Virtually all small business owners are, to some degree, concerned about increases in liability claims with 38% very concerned about increased liability when re-opening their business.
The full survey is available here.