As PPP Expires, Small Business Owners Blast Congress for Letting the Program Lapse Without Additional Assistance
Absent Additional Stimulus Funding 1 in 4 Small Business Owners Will Permanently Close Within 3 Months
Washington, DC — Today, as negotiations on the next phase of COVID-19 stimulus are at a standstill, Small Business Majority released calls by business owners in its network to immediately extend and reform the Paycheck Protection Program (PPP). New data from Small Business Majority has found that 80% of small business owners would like to take a second PPP loan. Without a second loan or other stimulus relief, 44% of business owners in Small Business Majority’s network will be unable to survive another six months, with 26% reporting they could permanently close within three months.
“This is the second time we have found ourselves here. PPP is about to expire, and Congress is not prepared to provide any additional help to small businesses on the brink of collapse,” said John Arensmeyer, Founder and CEO at Small Business Majority. “There are a number of small businesses in our network that cannot survive even one more month at the current rate of business without more help. While PPP is far from perfect, it is a needed program for millions of small businesses. It is unacceptable that PPP will expire tomorrow without a plan in place to save Main Street. If Congress can’t reach an overarching stimulus agreement, it ought to immediately loosen requirements for small businesses to take a second, forgivable installment of PPP and pass standalone legislation that will pull small businesses back from the edge. Otherwise, we are talking about entire communities at risk of losing their small business footprint.”
The calls for action by small business owners are included below:
“I know almost every customer that enters my shop on a first name basis. I know about their families, jobs, hobbies, and plans for vacations or creative projects. That is the identity that small businesses bring to our local communities. While I sell fabric and other supplies, my business is so much more than that. In the midst of this crisis, I worry that not only is my business in jeopardy, but that the identity of our community is too,” said Johanna Fox, owner of StitchCraft in Boca Raton, Florida. “Eight weeks of PPP assistance is not enough to sustain small businesses in crisis for 20+ weeks. While I am thankful for the help, I am discouraged that Congress is about to let PPP expire, while offering no other solution. Businesses are making tough decisions, and the uncertainty of when more help will be on the way is leaving many of us to question how much longer we can hold on.”
“Through no fault of our own, the pandemic has forced millions of small business owners—with otherwise healthy and thriving businesses—to consider closing our doors forever,” said Laura Lafta, owner of La Diva Cucina in Miami Beach, Florida. “I’ve long prided myself on being a job creator and contributing member of my community. Despite my best efforts to adapt, my business is suffering. It is unacceptable that Congress has walked away from finding a solution; leaving businesses, like mine, hanging in the balance. To receive assistance to date, I have had to put my home up as collateral. With no end to the pandemic in sight, I need further help to survive. Congress’s number one priority should be getting our economy back on track. Stimulus negotiations ought to immediately resume and any deal reached should extend PPP and provide automatic forgiveness for all loans issued under $150,000.”
“When Congress designed PPP, they assumed that a one size fits all program would work for the range of different business models that make up the small business community. They could not have been more wrong. PPP was never going to work for my business. The program assumed my highest expense was payroll and that my 1099 employees were expendable. Because of this flawed logic, I could not borrow enough money through the program to make a PPP loan worthwhile. Now I am at a disadvantage because I took a traditional EIDL loan and have no option for forgiveness. I urge Congress to provide automatic forgiveness for businesses that took modest EIDL loans because taking PPP was not in their best interest or they would have not qualified,” said Glen Miller, owner of Swing Dance America in Barrington, Illinois.
“The federal response to this crisis has been inadequate. For five months we have weathered this crisis, and Congress has only responded to the needs of some struggling small business owners with a one-time loan to cover limited expenses for eight weeks. In my case, my loan amount was decreased by the bank processing my application. Fearing that funds would run out, I had to take the small loan. Now I have used my PPP, and Congress has not offered any other solutions for businesses in crisis,” said Evalyn Shea, owner of Shea Writing and Training Solutions in Houston, Texas. “One in four business owners expect to go under within the next three months without additional funding. We need access to a second round of forgivable loans if we are to keep our workers employed and doors open and Congress must take action quickly.”
“Business is so up and down right now that it is next to impossible to predict what the future will hold. The one thing that I am certain of is that I will need additional relief soon in order to stay afloat. Allowing for a second PPP loan is a wise move, but I’m worried that requiring a business to demonstrate a 50% loss in revenue to take this loan is going to leave many struggling businesses, like mine, behind with nowhere else to turn for help,” said Valerie Jones, owner of Jones & Jones Used Cars Inc. in Shreveport, Louisiana. “Each business has a different threshold for how much revenue they can lose before being in jeopardy of closing. For some that threshold could be 50%, but for small businesses operating on razor-thin margins, it could be much lower. If Congress is serious about making sure that all small businesses will be able to recover from this downturn, they should loosen this requirement to give more businesses a chance to qualify and ultimately survive.”
“A large amount of the contracts that we work on are tied to the fiscal year, and therefore my 2019 revenue on paper looks smaller than it really is. When I received PPP, it was not enough to cover payroll for a two-month period. With business down and no end in sight, I need a second loan. But I don’t believe I would qualify under the proposed requirements, leaving my business in serious jeopardy. I call on Congress to resume negotiations and rethink the burden it is placing on businesses that will be unable to qualify for a second round of PPP. As it currently stands, Congress is inadvertently picking and choosing which businesses have a better chance of making it out of this crisis intact,” said Erica Robertson, owner of Adeptus Solutions, Inc. in Leesburg, Virginia.
About Small Business Majority
Small Business Majority was founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 65,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.