Scoop: Small businesses say even second round of PPP not enough
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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).
