Small businesses have another shot at getting a loan
Owners are being urged to file before the money runs out as it did last week
SHREVEPORT, La. (KSLA) — Many small businesses throughout the country and right here at home are getting more financial help.
And it’s all thanks to the Paycheck Protection Program.
The loan program operated by the Small Business Administration aims to keep small businesses afloat during this financially turbulent time amid the coronavirus pandemic.
President Donald Trump announced Tuesday that 450,000 loans totaling more than $50 billion were processed within the first 24 hours of the second round of PPP funding. That helps explain why small business owners are being urged to file this week — before the money runs out as it did last week.
Many people are calling it free money because they are forgiven loans from the federal government.
But when you speak to small business owners, they say getting the loans forgiven can be easier said than done. That’s because of what’s required.
Businesses with fewer than 500 employees can apply for the PPP funds and have the loans forgiven if the money is spent on payroll, benefits, rent and utilities while returning their work forces to pre-pandemic employee levels.
“Really, they want you back at full staff by June 30th, which I don’t really know how that’s going to take place because we don’t know what’s going to happen between now and June 30th,” said David Alvis, who owns five local Silver Star restaurants.
He explained that 75 percent of the loan money must pay for employee paychecks, regardless of how much slower their business is now.
"And we're ready to get them back to work. But I can't necessarily have them come to work and just hang out, you know."
On a scale of 1 to 10, measuring the difficulty of reaching pre-pandemic employment levels right away is up there, Alvis said.
"Oh, it's a huge challenge. I mean, it's a 10, you know. I mean, it'll be tough to do."
Rocky Rockett, executive director of the Greater Bossier Economic Development Foundation, said he sees the challenges business owners face.
He also reminds members of the public that the PPP loan program is only a stop-gap measure to buy businesses more time to work out a long-term plan.
“I was in several conference calls. And some of the bankers and so forth and trying to figure out some of this. It was great to have what people perceive was some free money up front. But it’s pay me now or pay me later. That’s the way it’s going to be.”
As for what would happen if these loan programs were unavailable to small businesses, Rockett shared a grim picture.
"I think you'd see mass bankruptcies. I think you'd see a large unemployment. I think you'd see some real dire consequences for what businesses were going to have to do."
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