Home Small Business The new survey shows that PPP loans do not reach the smallest...

The new survey shows that PPP loans do not reach the smallest firms

Larger businesses are more likely to receive a COVID bailout than smaller firms according to a survey of Bench.co. More than 60% of businesses with annual expenses in excess of $ 500,000 have received one Wage Protection Program (PPP) Or an Economic Disaster Loan (EIDL) loan. This is compared to smaller businesses with $ 50,000 or less in annual costs, which account for 20% of recipients of a PPP or EIDL loan.

So far though, the PPP loan is advertised is forgivable, but only 6% of the lucky small business that got the loan has been forgiven so far. This number is likely to increase as the 10-month deferred period ends.

PPP loans do not reach the smallest firms

Of the 10,000 small businesses surveyed, only 27% have received PPP loans with the majority being ineligible or prohibited from receiving COVID bailout. The survey showed that 17% of those who got a PPP loan, 10% received an EIDL and the next 10% received both bailout loans.

Other survey findings include:

  • Of the 6% that have been loaned off, 2/3 (72%) have received forgiveness for the entire loan under a PPP form.
  • Less than one fifth (16%) of those who applied have received forgiveness for less than 90% of their PPP loans.
  • E-commerce, software and web content businesses least affected by the pandemic represent 70% of businesses that do not receive funding at all.
  • Businesses like bars, restaurants, gyms and fitness centers have received 50% of some form of COVID relief.
  • Payroll businesses in heavily impacted industries received the largest PPP loan out of their annual costs. Art and entertainment businesses receive the largest PPP loan, about 12.5% ​​of their annual expenses. While restaurants and bars saw PPP loans accounting for nearly 10% of their annual expenses.

Why do smaller firms receive less COVID bailout?

According to Bench, the reason smaller businesses receive or are receiving less financial support may be because they have low or no paying costs – under the PPP eligibility requirement. This also means that smaller businesses will qualify for small loans. Furthermore, larger firms have a relatively larger resource to devote to PPP inquiries and application than one person’s activity.

Photo: Depositphotos



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