Scoop: Small businesses say even second round of PPP not enough
Many small businesses have applied for and received funds from the latest iteration of the government's Paycheck Protection Program, but most say they will need more help, a new survey from Goldman Sachs provided first to Axios shows.
What's happening: Only 11% of firms that received a PPP loan say they are very confident they will be able to maintain payroll if no further government relief is provided and 67% of loan recipients expect to exhaust their second loan funding in April or May.
- The survey of 1,293 Goldman Sachs 10,000 Small Businesses participants conducted Feb. 15-16 found that 66% of small businesses qualified for a second PPP loan and 83% of those who qualified have applied for a second PPP loan.
- 43% don’t think their business will return to normal until either the fourth quarter or 2022.
- 55% of those who received the loans were able to hire or rehire some employees.
Heads up: The new PPP loans were part of the $900 billion relief package signed by former President Trump in January, and President Biden is expected to temporarily limit big companies from applying, Axios reports.
The big picture: The latest round is shaping up to be much like its predecessor: A temporary help to some companies, but far short of a panacea for the small business sector.
- Thus far, 50% of small business owners have dipped into their personal savings and 58% have foregone paying themselves.
Watch this space: Just 30% of small business owners said they were very confident they could get access to a line of credit or loan for their business from a financial institution, compared to 54% who said they were very confident they could access one pre-pandemic.
- 82% of small business owners agreed it was important for Congress to create a new loan program to provide small businesses with access to longer-term capital.
Between the lines: Goldman analysts note that financing woes are that much worse for Black-owned businesses.
- 73% of eligible Black business owners have applied for a second PPP loan, compared to 83% of all small business owners.
- 42% of Black business owners who have applied for a second PPP loan have been approved and received loan funding (vs 54% overall).
- 16% of Black business owners are very confident they would be able to access a line of credit or loan for their business from a financial institution (30% overall).