WASHINGTON—Thirty-two percent of small business owners report that the extra unemployment benefits from the federal government made it harder to hire or re-hire workers, according to survey results released by the NFIB Research Center, an association for small businesses. However, the federal infusion has also helped support customer spending, with 9% of owners feeling like they benefited from the program that put more money in consumers’ pockets.
Congress is currently negotiating additional financial support for small businesses after the initial Paycheck Protection Program (PPP) loan period expired in early August. According to the survey, 44% of small businesses surveyed said they would apply or re-apply for a second PPP loan. Another 31% say they would consider applying for one.
“The health crisis is not impacting small businesses equally,” said Holly Wade, director of research and policy analysis, NFIB. “Small businesses are adapting to the abrupt shifts in consumer spending, managing customer and employees’ health and safety and complying with state and local mandates, which are all creating additional stress for small business owners. Many of them still need more financial assistance just to keep their doors open and staff on payroll.”
Key findings from the survey include:
- Most PPP borrowers (84%) have now used their entire loan, up from 71% in July.
- The remaining 16% of borrowers are likely not far behind on spending.
- Most PPP borrowers (81%) applied for the loan through the financial institution they normally use for business purposes.
- About 43% of borrowers plan to use the EZ form when applying for loan forgiveness.
- Thirty-five percent of respondents have applied for an Economic Injury Disaster Loan (EIDL).
- Nearly three-quarters (74%) were approved for a loan and 9% were denied.
- About 18% still have not heard yet about the status of their loan application.
- Of those who applied for an EIDL loan, 22% of loan applicants are “very satisfied” with the EIDL program overall and another 44% were “satisfied.”
- Almost half of PPP loan borrowers (47%) anticipate needing additional financial support over the next 12 months.
- Another 28% report sales levels of 50-74% from pre-crisis levels.
- Half (50%) are nearly back to where they were with some (14%) exceeding pre-COVID sales levels.
In addition, 21% of small business owners report they will have to close their doors if current economic conditions do not improve over the next six months, and another 19% of owners anticipate they will be able to operate no longer than 7-12 months under current economic conditions. Over half (61%) are better situated and do not anticipate any near-term problems. Additionally, most small business owners do not expect business conditions to improve to normal levels until next year at the earliest.