COVID-19

Small businesses await clarity before applying for PPP loan forgiveness

Justin Ho Oct 5, 2020
Heard on: Marketplace
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Chairs are stacked on tables at a closed restaurant in New York City. Many small businesses are waiting until they hear from Congress to apply for PPP loan forgiveness. Stephanie Keith/Getty Images
COVID-19

Small businesses await clarity before applying for PPP loan forgiveness

Justin Ho Oct 5, 2020
Chairs are stacked on tables at a closed restaurant in New York City. Many small businesses are waiting until they hear from Congress to apply for PPP loan forgiveness. Stephanie Keith/Getty Images
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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

New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?

Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday  — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

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