Results from a national survey of small-business owners released recently 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 percent of respondents reported that their current sales volume is 75 percent or more of pre-crisis levels, a significant improvement from the 28 percent 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 percent) have received their loans.
- Over half (59 percent) 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 percent of PPP loan borrowers anticipating having to lay off employees after using the loan.
- Over one-third of owners (35 percent) 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 percent of respondents are familiar with the new tax deferment provision and about 6 percent 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 operations accordingly as states loosen business restrictions.”