Five Takeaways From the Small-Business Relief Mess
PPP and EIDL, which ran out of money, weren’t that useful for most business owners. Here’s what to do now that more funding is available.
Many of the U.S.’s 30 million small businesses haven’t been able to get the relief they need since the coronavirus pandemic prompted shutdowns. If the crisis continues, roughly 3.5 million could close permanently over the next two months, and almost 7.5 million could close for good over the next five months, according to a report released on April 9 by Main Street America, a network comprising approximately 300,000 small businesses. The report estimates 35.7 million people employed by those businesses are at risk of losing their jobs.
The two primary federal relief funds for small businesses—the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program—have been overwhelmed and widely criticized. Both ran out of money quickly, prompting the Small Business Administration, the agency that runs the programs, to temporarily stop accepting applications.
A new bill signed into law on April 24 injected $320 billion into the PPP and $60 billion into the EIDL program. The SBA started accepting PPP applications again from lenders on April 27. The agency isn’t accepting applications for the EIDL program yet, according to its site. (Here’s our explainer on the PPP, which makes partially forgivable loans of up to $10 million through banks and other lenders, and the EIDL program, which makes loans of up to $2 million and grants it calls “loan advances” of up to $10,000 through the SBA.)
Some important points to bear in mind as you try to sort out how to get help for your business:
1. Expect more PPP drama and for the money to run out fast.