Relief Aid Is Finally Reaching U.S. Small Businesses After Delays

(Bloomberg) -- After initial delays in getting funding from a popular government coronavirus relief program, almost two-thirds of small businesses owners who applied have gotten money, a new survey shows.

Now the owners say they are most concerned about getting their customers back as some states lift stay-at-home orders.

Of the 77% who applied for a Paycheck Protection Program loan, 61% had money deposited in their account from their lender as of May 1, according to a National Federation of Independent Business poll of its members. That's much improved from a previous survey, which found that only 20% had gotten funding as of April 17.

“Small business owners have been eagerly waiting for financial assistance and many are now starting to receive it,” the NFIB said.

The previous NFIB survey found that about a quarter of its members were in the process of applying when the first tranche of $349 billion ran out on April 16 after just 13 days. Of those who applied and haven't gotten funding, 55% said they haven't received confirmation that their loan was approved, according to the survey.

The second round of the PPP program, which provides loans of as much as $10 million to small businesses to keep workers employed during the pandemic, started last week. As of May 1, $175.7 billion of an additional $320 billion had been processed. The SBA guarantees the loans that lenders disburse.

A separate survey of small businesses conducted April 21-27 for the U.S. Chamber of Commerce showed that about a third reported applying or trying to apply for a PPP loan, with 14% saying they hadn't yet received funding and 9% who had. The survey showed that 13% were still planning to apply.

Among those who have requested a PPP loan, 39% said the first round of funding was exhausted before they were approved. That was the biggest reported issue for those who applied and didn't receive the loan, the chamber said.

The NFIB survey also shows that 40% of small firms have requested low-interest loans under the separate Economic Injury Disaster Loan initiative, or EIDL, and 75% have sought advances that don't have to be repaid. Almost half reported receiving EIDL advance money but only 10% said they've gotten loan funding.

The SBA stopped accepting new EIDL applications on April 15 when the $17 billion allocated for coronavirus-related funding was exhausted.

While Congress has approved an additional $50 billion for EIDL loans and $10 billion for advances, the SBA just started accepting applications on Monday from only agricultural businesses that were made eligible by Congress in the last relief bill. The millions of other applications already received are being processed on a “first-in, first-out basis,” SBA said.

As of April 24, the agency reported it had approved 38,984 coronavirus-related EIDL loans for almost $8 billion and processed almost 1.2 million grants for $4.8 billion.

‘Increased Liabilities'

According to the NFIB survey, the top concern for businesses that are looking to reopen was getting their customers back, with 43% very concerned about it and 30% moderately concerned. Businesses are also worried about the threat of lawsuits, with 68% at least moderately concerned about “increased liability.”

Several business groups including the Chamber of Commerce are pushing Congress to limit lawsuits over exposures, in many cases for essential businesses that took recommended steps to protect customers and workers. Senate Majority Leader Mitch McConnell has said it will be a priority in negotiations with Democrats over their desire for aid to state and local governments.

Other top concerns included accumulating supplies to help stop the spread of the virus, such as hand sanitizer or facial coverings, as well as new workplace safety regulations. Just 17% said they were very concerned about filling open positions.

Despite the worries, 46% of respondents said now is the appropriate time to lift restrictions on non-essential businesses and stay-at-home orders. An additional 31% said the right time would come in the next 30 days.

The NFIB survey was conducted by email May 1 with a random sample of the group's membership database of about 300,000 small businesses owners, with 842 usable responses.

©2020 Bloomberg L.P.