Small business owners worried about PPP loan forgiveness
Small Business Majority surveyed its national network of small business owners to better understand who has benefited from the Paycheck Protection Program (PPP) created by the CARES Act, and to shed a light on their concerns with the program. The survey reveals a strong majority of small businesses have applied for a PPP loan, but most are worried about having the loan forgiven.
Nearly 7 in 10 (69%) small businesses have applied for a PPP loan and nearly 73% say they received a loan. Nearly 1 in 4 who received a loan (23%) did not receive the full amount they requested. Sixty-three percent of Black and Latino small business owners applied for a PPP loan, with 63% of those being approved for financing; however, nearly 3 in 10 of successful applicants did not receive the full amount they applied for.
Of all respondents who did not apply for PPP, nearly 3 in 10 responded that they did not seek financing because they were concerned the loan would not be forgiven, 19% said they were told or believed they would not qualify, and 12% could not find a bank to apply for a PPP loan.
Many of those who secured a loan expressed concerns with the program. Nearly 6 in 10 (58%) reported it’s a challenge to spend at least 75% of the loan on payroll. Notably, more than 8 in 10 are concerned about the rules around loan forgiveness and having their loan forgiven. An additional 80% said it is important that the eight-week deadline to spend the PPP proceeds be extended. A plurality of 44% reported that once their PPP funds run dry, they are likely to lay off employees again, while 1 in 5 aren’t sure if they’ll need to reduce their staff once they’re out of funds.