Small businesses await clarity before applying for PPP loan forgiveness
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The uncertainty surrounding the health of the president and several members of Congress has implications for this COVID-19 economy — especially when it comes to the next round of stimulus and the future of the Paycheck Protection Program, which was established under the CARES Act and provided loans to small businesses during the pandemic.
Small businesses across the country are hoping for those loans to be forgiven, and the Treasury Department said it’s about to start forgiving Paycheck Protection Program loans sometime this week.
The thing is, the Small Business Administration recently said the amount of forgiveness applications it’s received amounts to just around 2% of all PPP borrowers. Many borrowers are simply waiting to apply until Congress gives more clarity. But the waiting game isn’t easy.
Figuring out whether a business is eligible for full forgiveness, partial forgiveness or none at all can be complicated.
Mark Frier owns three restaurants in Vermont. He said how much forgiveness he receives will help to determine whether his business can survive.
“That’s the most terrifying part, is we want to do everything we can to try to turn this into full forgiveness and not end up with debt.” he said. “Especially, not knowing if we’re even going to survive this.”
Frier hasn’t applied yet. He said he’s waiting to see if Congress decides to automatically forgive loans under a certain amount.
“[Of] course, that would be something we’d want to make sure we’d wait and hopefully line up with,” Frier said.
Some borrowers haven’t even been able to apply for forgiveness. Jackie Laundon runs a public health consultancy in Colorado. She said her lender hasn’t opened the portal it uses for forgiveness applications.
Every time she sees a new email from her lender?
“I pretty much just drop everything I’m doing,” she said. “I go and I check to see, you know, ‘Is the portal open yet? Oh it’s not, OK.’”
Just in case her $15,000 loan isn’t forgiven, she’s making sure she has that amount set aside.
Laundon said she’d like to be able spend it, but she wonders, “Can I actually spend it without that feeling at the bottom of my stomach of uneasiness. Is this mine, or am I going to have to give it back?”
It’s been months since jewelry store owner Sophie Blake spent her PPP money. To control costs, she’s been trying to renegotiate her rent.
“We’re just asking for some sort of financial relief, because we were closed for three months, and that really impacted our business,” she said.
Blake said she’ll send in her forgiveness application within the next two weeks.
COVID-19 Economy FAQs
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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