U.S. government ends Paycheck Protection Program
By Reginald Tucker It was the lifeline for countless small businesses and retailers during the height of the pandemic, but now it has come to an end. The U.S. Small Business Administration (SBA) has announced that it has closed down the popular Paycheck Protection Program (PPP) effective May 31.
Since its inception last year, the PPP initiative has provided more than $ 798 billion in economic aid to small businesses and nonprofits across the country, keeping workers in work and helping businesses survive for an unprecedented amount of time in the history of the country.
“The Paycheck Protection Program provided more than 8.5 million small businesses and nonprofits with the lifeline they needed to survive a one-time economic crisis,” said Casillas Guzman, SBA administrator. “I’ve heard story after story from small business owners across the country about how PPP funds helped them keep the lights on, pay their employees, and give them hope.”
The Paycheck Protection Program, one of the first COVID-19 economic disaster relief programs to provide emergency funds to small businesses affected by the pandemic, has played a critical role in America’s recovery. But it was not without its problems. It was not an easy program to navigate, and the rules regarding eligibility and forgiveness of loans seemed to be constantly changing. Worse, millions of disadvantaged businesses – especially the country’s smallest businesses and those of women and people of color – were taken out of the first round of relief.
Since taking office, Guzman noted, the Biden-Harris Administration has pushed for an effective and equitable implementation of this program, emphasizing that small businesses get the support they need to keep afloat and empower millions of Americans. service. The program has supported the smallest small businesses: 32% of loans went to low- and middle-income communities. In addition, community financial institutions played a pivotal role in 2021 PPP loans to underserved communities during this period, providing 1.5 million loans totaling $ 30 billion. PPP loans in 2021 averaged $ 42,000, another indicator of targeted relief from the smallest small businesses.
“I am proud of the work we have done to start correcting these inequalities – by 2021, 96% of PPP loans went to small businesses with fewer than 20 employees,” said Guzman. “Going forward, we will continue to prioritize equity across all SBA programs and services.”
For its part, the floor covering industry also benefited from the opportunities offered by the program. From small to midsize manufacturers using the funding to keep their operations going, to flooring dealers needing a pillow until things got back to normal, PPP funds served as a kind of bridge. But as the nation began to turn the corner of the pandemic, many saw the writing on the wall.
“I felt this had to come,” said Scott Humphrey, CEO of WFCA, referring to the end of the PPP program. “In reality, those who realized their need were proactive and focused on the long-term stability of their businesses, were given ample time to apply for the PPP loans. The WFCA, and organizations across the industry, saturated the floor media and social media with information about PPP loan options and how to apply for them. “
Those floor covering retailers who had solid foundations in the US before the start of the pandemic generally managed to grow their businesses – save for a few difficult financial quarters. But it’s safe to say the event had – and still has – lasting effects. “The impact of COVID-19 exceeded our expectations, but the pains of the pandemic will not end because of immunizations and / or herd immunity,” said Humphrey. “While we pray that the serious threat to our health posed by the virus created is over, the real challenges for many companies have just begun. Money is no longer the greatest need; now we need to focus on supply chain issues and the best use of the money received. “
The PPP initiative is just one of eight emergency relief programs set up by Congress to help small businesses during the COVID-19 pandemic. Other programs include Economic Injury Disaster Loan (EIDL), EIDL Advance, Targeted EIDL Advance, Supplemental EIDL Advance, Restaurant Revitalization Fund, Shuttered Venue Operators Grant, and SBA Debt Relief Program.
(For more information on this story, see the June 7/14 issue FCNews.)