The Paycheck Protection Program isn’t working for some tiny companies, according to another report by S&P Global Market Intelligence, a fiscal information research company.
The report released Thursday suggests over 150 companies that in aggregate obtained countless millions of dollars in PPP funds have announced plans to lay off thousands of workers. The report’s authors discovered the coronavirus catastrophe is damaging businesses for much longer than the initial PPP program considered.
The firms —such as music venues, resorts and physical fitness centers—obtained between $291.6 million and $647.5 million in complete PPP funding. However, those firms announced plans involving May 1 and July 17 to put off or furlough 15,814 workers, according to the analysis. In contrast, the U.S. Small Business Administration earlier this month stated PPP funds helped rescue 51 million projects, whereas S&P Global estimated that the program stored a less powerful 13.6 million occupations.
Roughly 44% of the Advances from the S&P Global evaluation are deemed permanent, while companies plan to rehire the impacted workers in 27% of the situations. Future occupation status is uncertain in the rest of the layoffs.
S&P Global Market Intelligence ran the analysis by fitting companies names on PPP loans into layoff notices. The report notes layoff notices weren’t obtainable in six states—Arkansas, Hawaii, New Hampshire, Pennsylvania, Tennessee and Wyoming.
PPP financing offers forgivable loans in the national government should at least 60% of their funds are utilized for legislative acts and the firm doesn’t lay off any workers, among other prerequisites. If a company breaks some of these requirements, the financing becomes a low-interest loan which might need to be repaid.
Music places are some of those hardest hit companies throughout the ordeal, according to the report. Carnegie Hall in New York City obtained a PPP loan of $5.5 million but nevertheless furloughed 316 full-time, temporary and part-time workers after making the choice to stay closed until January 2021.
Second Round of PPP May Be Coming
The S&P Market Intelligence Report comes only days after GOP senators announced their suggestion to another coronavirus stimulation package. The HEALS Act, a title used for any range of stimulation bills supplied by Republican senators, includes plans for another round of PPP financing.
Launched by U.S. Sens. Marco Rubio (R-FL) and Susan Collins (R-ME), the Continuing Small Business Recovery and Paycheck Protection Program Act would provide a 2nd forgivable loan to companies that can reveal a minimum a 50% decrease in gross earnings during the term.
The proposition also would reform parts of the initial PPP loan program criticized by small companies, broadening the kinds of expenses eligible for forgiveness to add employee protection and operations expenses, covered supplier prices like food orders to get a restaurant and particular property damage incurred through protests. Some $100 billion will be allocated in long term, cheap loans to qualified “recovery sectors” of this market.
“The PPP and the other small business provisions under the CARES Act have been an historic lifeline to millions of small businesses and tens of millions of American workers,” Rubio stated in a media release. “Now, Congress must take action to help industries and businesses, especially minority-owned small businesses and those in low-income communities, that have been hit hard by the COVID-19 pandemic.”
It’s uncertain when Congress will approve another stimulus package. Top White House officials are negotiating with Democrats, but discussions on accountability protection proposals for companies coverage cases of COVID-19 disease could delay improvement.