With President Trump signing the second tranche of Paycheck Protection Program loans into law Friday afternoon, small businesses across Michigan as well as around the nation should jump to apply, reapply or check in with their financial institution about the popular program, U.S. Small Business Administration officials said.
In a media call Friday morning, U.S. Small Business Administration’s Great Lakes Regional Administrator Rob Scott and SBA’s Cleveland, Columbus, Indiana and Michigan District Directors talked with area reporters highlighting how small businesses could benefit from Paycheck Protection Program and Health Care Enhancement Act passed by Congress on April 23.
“Now’s the time to begin contacting your lender,” Scott said, noting that he expected the portal to open early Monday to applications.
He said the nation through the PPP had offered “more loans in 14 days” than it had in 14 years, and all of it was done by working around the clock. Scott also added that he believes the SBA “will be going into overdrive” to get the new loans out as well.
Michigan has received 43,400 PPP loans worth about $10.4 billion, Scott said. He called the effort “a marathon for our agency and not a sprint,” encouraging businesses to seek help no matter what size they are. He noted there are 5,000 PPP lenders from large banks to credit unions to community banks at work.
Immediately after the President signed the legislation, emails started to come out to businesses that were thinking of or had previously applied. One example told recipients, “funds for round 2 of the PPP have just been released. We are advising everyone to submit their Paycheck Protection Program application immediately as funds will likely run out again by the end of the week. There is no downside to apply through multiple sources as should put your business in the best position to receive this program. Click Here to Complete Your PPP Application.”
Scott did not comment directly on a media question about when this second round of funding may run out, but he did indicate that he believes applications will be plentiful.
National Federation of Independent Business Research Center released a survey this week on the small business loan programs, which doled out all of its funds within two weeks. Small business owners were asked about the Paycheck Protection Program and the Economic Injury Disaster Loan on April 17, the day after the programs ran out of money.
The survey found about 20% of submitted applications have been fully processed with funds deposited in the borrower’s account, but 80% of respondents said they are still waiting, and many do not know where they are in the application process.
Most small business owners believe it will take beyond 2020 to recover from the economic impact of COVID-19, with only one-third of small business owners believing their community will get back to a normal level of economic activity by the end of the year. A quarter of owners believe it will not be until 2022 or later before the economy returns to normal.
Forecasts are tough right now, added Stifel Chief Economist Lindsey Piegza, who offered a statement on the economic impact of Coronavirus Fears and U.S. recession.
In part, she said, “This week we walk through some of the latest data points, some of which are beginning to highlight an increasingly bumpy path of the U.S. economy as we move further into the second quarter, as well as provide an updated outlook for domestic growth which may be at odds with some of the more optimistic forecasts from public officials or other calls on the Street.”