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    Business Resource | 3 min read

    PPP Arrives At Critical Point For SMBs

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    COVID-19 kept spreading, though closures in combination with warmer weather did for a time slow it down. But the economy on Main Streets across the U.S. ground to a screeching halt as foot traffic evaporated overnight, cash flow pain set in and entrepreneurs began to scramble to figure out how they were going to survive.

    And while the Paycheck Protection Program (PPP) loans rolled out last year to help small and medium-sized businesses (SMBs) and their employees better whether the storm, according to PYMNTS  latest data, 2021’s Main Street Business Survivor Study: Understanding The Profile Of Main Street SMBs That Have Weathered The Pandemic’s Fallout, those small businesses are looking less for the PPP’s second round, now rolling out, to help continue to get them through. Only 16 percent of Main Street businesses report having actually applied for such assistance in the last three months, compared to an average 21 percent that had done so since March 2020.

    It’s not that the need isn’t still there — PYMNTS’ latest research also shows that 12 percent of all Main Street SMBs have permanently closed since the pandemic began, in fact, and 45 percent of those that remain feel they could be at risk of closing in the near future. The damage was real, and the effects and fear the pandemic period engendered are long lasting.

    Nor are those merchants failing to be proactive about their survival. The data demonstrates that SMBs are changing up their product offerings, migrating to digital channels and restructuring their employment line-up when it comes to what they are doing to survive today — and, hopefully, the data demonstrated, thrive tomorrow.

    The PPP Progress

    Passed In December,  the PPP second round opened up in mid-January for SMBs that failed to apply the first time or that needed an additional allocation of funds. Similar in structure to the first round loans, the second round offered some additional perks for restaurant and hospitality players, a lower loan cap and new requirements for businesses apply for their second loan.

    Firms  were also allowed to apply again providing they had 300 or fewer employees, have used or will use their entire first allotment of PPP funds and can show a 25 percent gross revenue decline at minimum in any 2020 quarter compared with the same quarter in 2019.

    Those new requirements, according to PYMNTS data, slowed a lot of firms in applying for another infusion of PPP dollars, but they weren’t the only reasons — the businesses PYMNTS surveyed offered a variety of reasons for having not applied for PPP loans.

    Nineteen percent of survivor firms did not apply for PPP loans in the last three months because they worry about the implications it might have on their future taxes, while 11 percent are simply unsure whether they will make enough revenue to return the funds.

    Lack of knowledge also seems to be a fairly significant issue as 17 percent of merchant surveys reported they did not know such loans were available.

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