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Report: Many business owners still awaiting PPP funds
Report: Many business owners still awaiting PPP funds
Listen to this articleThe majority of business owners who applied for the federal government’s Paycheck Protection Program loans were still awaiting funds or approval last week, even as the second round of funding became available, according to a new report from Paychex Inc.
The study, which polled 300 randomly selected U.S. business owners with 500 or fewer employees last week, found that 44 percent of those businesses had applied for loans. Of those, 45 percent had submitted paperwork and were awaiting approval; 17 percent had been approved but were awaiting payment; 5 percent did not know the status of their application; and 5 percent said their loan application was delayed.
Just 15 percent of business owners in the study said they had received payment.
The survey also showed that larger businesses were more likely to have received payment from the first round of funding. Some 29 percent of those with 50 to 500 staffers had received payment, while 11 percent of those with 10 to 49 employees had received payment and 8 percent of those with two to nine employees had received payment.
“In many cases, as the COVID-19 pandemic continues, the status of a PPP loan is make-or-break for business owners and their employees as they exercise every opportunity to keep their businesses afloat and maintain staff salaries and benefits,” Paychex president and CEO Martin Mucci said in a statement.
The Paychex study found that of those business owners who had applied for a PPP loan, 91 percent said the funds will help them stay in business. Seventy-two percent will use the funds to pay salaries, while 37 percent will pay rent, mortgage or utilities. Some 41 percent with 50 to 500 employees will prioritize funding employee healthcare.
The study also found that business owners’ optimism has dropped significantly since the beginning of 2020. On a 1 to 100 scale, with 100 being the highest optimism, business owners’ optimism rating was 77 in January. That has dropped to 45.
Despite that drop, business owners ranked their business resiliency as 69 of 100.
The study has a +/- 5.66 percent margin of error.
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