Eighty-six percent of small-business owners aren’t planning layoffs after PPP funds are used up
SALEM, Ore., June 23, 2020—Results from a national survey of small-business owners released today by their leading association revealed a variety of information on such things as the use of the two federal loan programs, how many would be using the extended forgiveness period, how many will need more money, and awareness of the tax deferment provision.
“It’s encouraging to see that sales are finally improving for small businesses as the economy continues to reopen,” said Anthony Smith, Oregon state director for NFIB, which conducted the survey. “Since the federal aid programs were designed to be temporary, getting revenues back to pre-crisis levels will be a key determinant in whether small businesses will be able to stay open, and keep their employees working, or whether they will have to reassess their business operations moving forward. With 86 percent of small business owners telling us they don’t have plans to lay off their employees once they have used their PPP funds, it seems like business owners are expecting sales to continue to improve – and we started to see that in last month’s uptick in the Small Business Optimism Index. Let’s hope that holds true.”
Key findings from the survey include:
- About 40% of respondents reported that their current sales volume is 75% or more of pre-crisis levels, a significant improvement from the 28% reporting the same in NFIB’s May 18 survey.
- The number of small business owners applying for a Paycheck Protection Program (PPP) loan increased slightly over the last two weeks.
- Nearly all PPP applications (97%) have received their loans.
- Over half (59%) of PPP loan borrowers are taking advantage of the extended 24-week forgiveness period.
- Some owners report having to adjust their workforce to reflect the economic environment with 14% of PPP loan borrowers anticipating having to lay off employees after using the loan.
- Over one-third of owners (35%) have applied for an Economic Injury Disaster Loan (EIDL) and most are still waiting for their loan to be processed.
- Economic conditions have improved for many small business owners over the last month as states have eased business restrictions and stay at home orders.
- The economic and health crisis is lasting much longer than the PPP’s initial design of primarily supporting two months of payroll and limited non-payroll expenses, and of the EIDL’s reduced loan distributions.
- About 41% of respondents are familiar with the new tax deferment provision and about 6% of respondents have taken advantage of it.
- Most small business owners have had to adjust their business operations to some degree due to the COVID-19 health crisis.
“Small businesses are entering the fourth month of economic crisis and are still experiencing a heavy amount of uncertainty and complications,” said Holly Wade, NFIB Director of Research & Policy Analysis. “Now that owners have more flexibility in using their PPP loan, they can focus on adjusting business operation accordingly as states loosen business restrictions.”
Keep up with the latest Oregon small-business news at www.nfib.com/oregon.
For more than 77 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 its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
National Federation of Independent Business/Oregon
3340 Commercial St. S.E. Suite 210
Salem, OR 97302