One-fourth of small business owners say economy won’t return to normal until 2022 or later
Vermont Business Magazine The NFIB Research Center released a survey today on the small business loan programs. 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. 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.
“Small businesses were prepared and ready to apply for these programs, the only financial support options for most, and it is very frustrating that the majority of these true small businesses haven’t received their loan yet,” said Holly Wade, NFIB Director of Research & Policy Analysis. “Small businesses make up nearly half of the economy and it’s crucial that their doors stay open.”
“As Vermont’s small businesses struggle to survive, it’s disappointing that federal funding has run out so quickly when this survey shows many of them still haven’t been approved for loans,” said Shawn Shouldice, NFIB’s Vermont State Director. “Let’s hope this next round of funds is quickly approved before it is too late for all the Mom and Pop shops out there.”
Key Findings of the Survey Include:
About three-quarters of small business owners (almost all employer businesses) have submitted an application for a PPP loan as of April 17.
· About one-in-five (20%) of submitted applications have been fully processed with funds deposited in the borrower’s account.
· Nearly 80% are still waiting, many not knowing where they are in the process.
About 40% of small business owners successfully submitted an application for an EIDL through the SBA website.
· Among those who submitted an application, most (77%) requested the emergency grant of up to $10,000.
· Of those who requested the EIDL emergency grant, about 10% have received the funds.
· Essentially, all of the EIDL applicants (99%) have yet to receive the loan.
Most small business owners believe it will take beyond 2020 and into the years following to get back to normal economic activity.
· About one-third of small business owners believe their community will be back to a normal level of economic activity by the end of the year.
· Just under 40% believe more normal levels of economic activity will return in 2021.
· A quarter of owners believe it will not be until 2022 or later before the economy returns to normal.
Questionnaire
1. Have you submitted an application for a Paycheck Protection Program (PPP) loan?
74% 1. Yes
26% 2. No
2. Has the loan been deposited to your bank account yet?
20% 1. Yes
79% 2. No
3. If you submitted an application, how much of the total loan amount are you expecting to be forgiven after the 8-week forgiveness period?
49% 1. 100% of the loan
27% 2. 75-99% of the loan
6% 3. 50-74% of the loan
3% 4. Less than 50% of the loan
15% 5. I don’t know.
4. If you have not submitted an application yet, are you in the process of applying for a PPP loan?
26% 1. Yes
74% 2. No
5. Have you submitted an application for an SBA Economic Injury Disaster Loan (EIDL)?
40% 1. Yes
60% 2. No
6. Did you request the Emergency Grant when you applied for the EIDL loan?
77% 1. Yes
10% 2. No
12% 3. I don’t know.
7. Has the EIDL emergency grant been deposited to your bank account yet?
10% 1. Yes
90% 2. No
8. If so, how much did you receive?
10% 1. $1,000
24% 2. $2,000-$4,999
20% 3. $5,000-$9,999
47% 4. $10,000
9. Has the EIDL loan been deposited to your bank account yet?
1% 1. Yes
99% 2. No
10. If you have not yet submitted an application, are you in the process of applying for an EIDL loan?
9% 1. Yes
91% 2. No
11. How long do you think it will take before your local economy is back to near pre-crisis levels of economic activity?
0% 1. It is now
11% 2. By July
21% 3. By December
39% 4. Sometime in 2021
20% 6. Between 2022-2024
4% 7. After 2024
5% 8. Other ______________
12. Please classify your major business activity, using one of the categories of examples below.
*If more than one applies, circle the one which contributes the most toward your gross sales or total revenues.
14% 1. Construction (general contractor, painting, carpentry, plumbing, electrical, etc.)
14% 2. Manufacturing and mining (dairy processor, printer, publisher, etc.)
6% 3. Transportation, communication, public utilities (truckers, movers, broadcasters, etc.)
5% 4. Wholesale (grain elevator, equipment distributor, manufacturer's rep., etc.)
20% 5. Retail (service station, restaurant, bar, radio and TV store, drug store, apparel, etc.)
5% 6. Agriculture (veterinarian, forestry, landscaping, fisheries, etc.)
6% 7. Financial, insurance, real estate
22% 8. Services (house cleaning, auto repair, salon, etc.)
9% 9. Professional services (attorney, physician, skilled nursing, etc.)
1% 10. Other (please describe) ______________________
13. Number of Employees
7% 1. No employees
16% 2. 1-2 employees
25% 3. 3-5 employees
19% 4. 6-9 employees
18% 5. 10-19 employees
11% 6. 20-49 employees
4% 7. 50-199 employees
1% 8. 200-499 employees
The full survey is available here.
Source: MONTPELIER, April 20, 2020 – The NFIB Research Center