As Senate Republicans push new PPP, small businesses say it falls short
Some small business owners say that the renewed push by Senate Republicans to add money to a key emergency loan program won't be enough to help them survive as the coronavirus pandemic drags on.Posted — Updated
While more money wouldn't hurt, reopening the Paycheck Protection Program is unlikely to solve their biggest struggle: bringing back customers.
"What would be more helpful is if everybody would wear a mask so we can get the economy going again," said Laura Landsiedel Ford, the co-owner of Hands on Health in North Carolina.
The massage therapy business reopened in June after the state's lockdown lifted and has survived with most of its therapist working a full schedule. But she's worried winter could bring an increase in Covid-19 cases and a slowdown in business.
She's also frustrated with Congress for taking so long to act. Lawmakers have been negotiating unsuccessfully since the Paycheck Protection Program stopped taking applications in August, and even this week's push is unlikely to get a law passed.
"I've always done better when I can predict what's happening, so my eyes are on it all the time. But I almost feel like I have PTSD," Landsiedel Ford said.
The small business program was designed back in March to keep businesses afloat temporarily. It lent out more than $500 billion in forgivable loans between April and August. But the amount of the loan is meant to cover just eight week's worth of rent and payroll expenses.
That's a drop in the bucket for businesses like Pilate-ology, a studio outside Los Angeles, that remains closed due to local lockdown rules. Even once they're allowed to reopen, it wouldn't be at full capacity and may still be unsustainable.
Pilate-ology doesn't have a lot of employees, so the amount they received from the first Paycheck Protection Program was small. The partners sat down last week to discuss how long they should hold onto their lease.
"Even though we drive the economy, I feel like support for small businesses is going to fall through the cracks," said co-owner Jessica Kuiken.
About half of small business owners say they will need more financial support within the next six months in order to survive, according to a recent survey by the National Federation of Independent Business. About 20% said their revenues are still less than half of what they were before the pandemic.
The Republican-controlled Senate is expected to vote on a standalone Paycheck Protection Program bill this week, but it's likely to be blocked by House Democrats who want a sweeping economic aid package -- even though there's bipartisan support for extending the small business loans. Still, the renewed chatter may signal to some small business owners that they haven't been forgotten just before Election Day.
But for others, it may simply be a cruel reminder of how the loan wasn't very helpful in the first place. LB Kitchen in Portland, Maine, received a loan in the first round but still had to shutdown one of its two locations.
The uncertainty around how and when the loans would be forgiven made co-owner Bryna Gootkind uneasy about using the money at all. The rules changed once early on, and further guidance continues to trickle out. Generally, the loan is forgiven if 60% of the money on payroll and 40% on rent, but it's unclear on what exactly counts.
"I don't trust the people making the decisions around this. I'd be a nervous wreck if I actually spent the money," Gootkind said.
Now that LB Kitchen has pivoted to a take-out only restaurant, business is cruising along and sales about even with where they were last year at the one location. Gootkind is planning to extend hours and possibly hire more workers -- but certainly isn't expecting to apply for another Paycheck Protection Loan even if she could.
"I feel lucky. I wish there was a way to help other restaurants," she said.
Copyright 2023 by Cable News Network, Inc., a Time Warner Company. All rights reserved.