April 16, 2020

News Roundup for Small Business Owners

The latest news about relief efforts for small businesses, particularly via the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).

• And like that, it’s gone. The SBA has stopped accepting new applications for the Paycheck Protection Program, citing lack of appropriated funds. For those of you who have received the relief, congratulations. Kim Buckley, my coworker here at Masterplans, put together this great article about wisely deploying PPP funds. A few key points: 1) keep very detailed accounting of your expenditures, and be sure to do the math first; 2) think about projects that can help your business grow and evolve; 3) look at your products/services to see how you can improve your value to your customers. (SBA)
• For those of you who didn’t receive a PPP Loan, it may be time to contact your elected officials again. As I stated the last couple days, there is bipartisan support for adding more money to the program, but there are still strong disagreements about how that should occur. (Boston Globe)
• It’s also time to start talking about what worked and what didn’t work the first go-around. The SBA released a report today about the program approvals through April 13. One stat that jumped out at me: 29% of the total funding was in loan amounts that exceeded $2 million, and 9% of it went in loans over $5 million. Since loan amounts were based strictly upon payroll, we can math out payroll expenses. A $2 million PPP means an annual payroll of $9.6 million, while a $5 million loan would imply a $24 million payroll! That’s not what I think of when I think of a small business. (SBA)

• I liked this Op-Ed in The Atlantic from a couple restauranteurs as to why the PPP and EIDL failed them. Small businesses employ half of our nation’s workers (or at least they used to; more on unemployment below), and according to the Brookings Institution, 54% of small businesses are either immediate or near-term risk of closing. This amounts to 4.2 million businesses and 47.8 million jobs. 16% of the businesses at-risk are bars and restaurants. (The Atlantic, Brookings Institute)
• Who was left out? Quite possibly those who needed it the most. This editorial from The Washington Post is stunning. If you read nothing else today, read it. “All of this favors those with access to top-dollar advice, while leaving the smallest, less connected businesses quite possibly bereft of funds. Think minority firms. Think businesses owned by women. Think 10-person companies vs. those with 200 employees.” (The Washington Post)
• Back to unemployment. The Department of Labor issued their weekly report, and another 5.2 million workers filed for unemployment last week. That’s 22 million in 4 weeks, about 13.5% of all workers. Economists forecast the unemployment rate will hit 15% this month, which is the highest unemployment rate since the Great Depression. It gets scarier when you start to think about how long states can afford to supply unemployment benefits to these workers. (CNN Business)

Previous Entries:

Wednesday, April 15 | Tuesday, April 14 | Monday, April 13 | Friday, April 10 | Thursday, April 9 | Wednesday, April 8 | Tuesday, April 7 | Monday, April 6

Masterplans is a veteran-owned business that specializes in providing the highest-level business development consulting located in Portland, Oregon. For 17 years we have helped thousands of entrepreneurs launch new businesses and put their ideas in motion. Now, more than ever, we want to see these same businesses survive the largest economic disaster of our generation.