SHREVEPORT, La. (KSLA) – Many small businesses across the country and right here at home are getting more financial aid.
And all thanks to the Paycheck Protection Program.
The Small Business Administration loan program 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 had been processed in the first 24 hours of the second round of PPP funding. That helps explain why small business owners are being asked to file an application this week – before they run out of money, as they did last week.
Many people call it free money because they are given loans by the federal government.
But when you talk to small business owners, they say lending is easier said than done. That is because of what is required.
Firms with fewer than 500 employees can apply for the PPP funds and waive the loans when the money is spent on payroll, benefits, rent and utilities while their workforce is brought back to pre-pandemic employee levels.
“Really, they want you back with full staff by June 30th, which I don’t really know how to go because we don’t know what’s going to happen by June 30th,” said David Alvis, owner of five local Silver Star restaurants.
He explained that no matter how much slower their business is now, 75 percent of the loan money goes on employees’ paychecks.
“And we’re ready to get her back to work. But I can’t necessarily come to work and just let her hang out, you know. “
On a scale from 1 to 10, measuring the difficulty of immediately reaching pre-pandemic employment levels is right at the top, Alvis said.
“Oh, it’s a huge challenge. I mean it’s a 10 you know
Rocky Rockett, executive director of the Greater Bossier Economic Development Foundation, said he sees the challenges entrepreneurs face.
He also reminds the public that the PPP lending program is just a stopgap measure to give companies more time to devise a long-term plan.
“I’ve been to several conference calls. And some of the bankers and so on and try to find out some of it. It was great to have what people perceive as free money upfront. But pay me now or pay me later. So will it be.”
What would happen if these small business loan programs weren’t available, Rockett shared a grim picture.
“I think you would see mass bankruptcies. I think you would see big unemployment. I think you would see some really dire business consequences.”
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