Paycheck Protection Program receives roughly $300 Billion. What Does That Means For Florida's Small Businesses?
Last night, Congress passed a COVID-19 relief package. In it, more than $284 billion will go to the federal Paycheck Protection Program (PPP). It gives loans to small businesses who then use that money to pay their employees. The program's goal is to prevent layoffs for businesses impacted by the pandemic. The program stopped accepting applications in early August, but now, if President Trump signs the COVID-19 aid package, business owners could once again apply for PPP loans.
Bill Herrle heads the National Federation of Independent Business (NFIB) in Florida. He says the aid is welcome.
"We are showing increasing rates in the number of businesses that are fearing failure in the next quarter if things don't change. A relief package makes a big difference and could be that change that will allow them to still be operating into the second quarter of 2021 with open promise," Herrle says.
Herrle says back in September his organization surveyed small independent businesses nationwide. One in five respondents said they anticipated potentially closing in the next quarter if they didn't get aid. Now, Herrle says the most recent number is one in four, or 25%.
"It's very representative of Florida because Florida is so consistently represented of the nation," Herrle says.
And he says his organization supports new measures included in the COVID-19 relief bill.
"Deductibility of business expenses as a forgivable portion of the loan. That's for supplies, materials, machinery that businesses have been investing in so they can stay open. And that was a big win for us. The second would be it includes simplified loan forgiveness for smaller PPP loans. It's sort of a one-step forgiveness process, and that's going to allow those business owners to stay focused on rebuilding their business," Herrle says.
He also says businesses had to choose between the PPP and another loan program. Now, he says, they can sign up for both.
"They have brought down that obstacle so businesses can still apply for both," Herrle says.
Florida Bankers Association President and CEO Alex Sanchez says the state's banks are ready to help small business owners.
"As in round one where they worked around the clock in processing these loans, worked around the clock on weekends, Monday through Friday, and then Saturday and Sunday. Even holiday weekends. I remember Easter weekend our bankers were processing these loans because you want to help Florida's small businesses before the funds was used up nationally," Sanchez says.
He expects that Florida bankers will work long hours and throughout weekends and holidays again during the next rollout of PPP money.
"Our bankers are ready to go as they were in round one as soon as they get the green light from the Small Business Administration," Sanchez says.
Sanchez strongly recommends small business owners make sure they have a relationship with their Federal Deposit Insurance Corporation (FDIC) banker.
"It's important. It's part of your financial planning as a business owner," Sanchez says.