Businesses hope for 2nd PPP chance
Five months after virus pandemic hit, many need another loan.
Small businesses are in limbo again as the coronavirus outbreak rages and the government’s $659 billion relief program draws to a close.
Companies still struggling with sharply reduced revenue are wondering if Congress will give them a second chance at the Paycheck Protection Program, which ends Friday after giving out 5.1 million loans worth $523 billion. While the program that began April 3 has gotten mixed reviews, business owners still need help as the virus continues to spread and hamstring the economy.
“They’ve exhausted their funds and are looking for a Round Two,” says Molly Day, a spokeswoman for the National Small Business Association, an advocacy group.
Congress is debating further help for small business as part of a broader coronavirus relief package.
At the moment, negotiations on the relief package have bogged down over unrelated issues including unemployment benefits for laid-off workers.
When the PPP was created, the widespread expectation was the pandemic would subside by the summer, businesses would reopen and life would return to some semblance of normality. That’s why Congress mandated that businesses use the money within eight weeks or forfeit the chance for loan forgiveness.
Instead, late spring and summer brought a resurgence of the virus in many parts of the country as companies reopened. Many restaurants are either closed again or operating with severe restrictions on the number of diners they can serve. Sales are down at many retailers as customers would rather shop online than take a chance on an in-person visit. And companies that cater weddings or produce corporate events have little or no revenue as gatherings have been canceled, some of them for the rest of this year.
Many businesses spent the PPP money to meet the terms for loan forgiveness, although they would have been better served saving it. (Congress later gave businesses 24 weeks to spend the money, but it was too late for many.) Five months after the pandemic hit the U.S., they need another loan.
Business is only 25% of normal at Coach’s Corner, a restaurant in Elk Grove Village, Illinois, that used to be crowded after Little League and high school football games. A PPP loan helped co-owner Sue Remien hire back her 18 full- and part-time staffers, but when the money ran out, she had to lay six off again. Business is limited by social distancing and unpredictable because many customers are still uneasy about dining out.