After using their Paycheck Protection Program (PPP) loans, 14 percent of borrowers foresee needing to lay off staffers, per a survey from the NFIB Research Center. Half of those expect to lay off one or two workers, according to a Tuesday (June 23) announcement of the survey results.
Four in 10 – or 40 percent – of borrowers said that having room for adjustments, such as allowing a greater share of the loan to go to non-payroll expenses and new FTEE exclusions, was very helpful in optimizing loan forgiveness. An additional roughly two in 10 – or 19 percent – saw those adjustments to be “moderately helpful.”
One in 10, however, indicated that the initial terms were suitable for their purposes, while 9 percent of borrowers were not acquainted with the recent changes.
The organization said that most PPP borrowers continue to tap into the loans, but many will have used up their resources during the next few weeks and will be ready to seek forgiveness for their loans. As it stands, just 3 percent of PPP loan borrowers have sought forgiveness.
Additionally, 56 percent of owners foresee that they will require less than $50,000 to back business operations in the short haul, but 27 percent expect to require more than $100,000.
In a June 10 hearing, Treasury Secretary Steven Mnuchin said that the PPP has supported more than 75 percent of U.S. small to medium-sized businesses (SMB) in terms of payroll. However, the official told the Committee on Small Business and Entrepreneurship that big and small firms will need further help.
Mnuchin noted that the Treasury is fully committed to helping employees return to work and retain their positions.
On June 5, President Donald Trump inked a bill to offer more spending options for PPP loan holders, as some companies struggle with satisfying key standards for loan forgiveness. The president said at the time that the legislation would “especially help restaurants, hotels and other businesses that have been very hard hit by the virus.”