HENDERSON — A new $900 billion COVID-19 relief and stimulus package recently signed into law by President Donald Trump will include an extension of the Paycheck Protection Program that aided small businesses and self-employed workers during the early days of the pandemic.
The news of additional PPP loans came as welcome announcement for Henderson-Vance Chamber of Commerce President Michele Burgess, who said that businesses in the region need as much help as possible as concerns mount about short and long-term consequences of increasing COVID-19 cases.
“I’m excited about it just because I think it will help our businesses,” Burgess said. “To my understanding, the PPP loans will be aimed more toward small businesses, so those things are definitely great.”
Those who obtain a PPP loan are allowed to apply for low-interest loans to pay for payroll and other costs, with the overall amount typically 2.5 times the applicant’s normal average on monthly payroll costs.
Under the COVID-19 relief package, many of the same guidelines for PPP loans remain intact, which include businesses requiring to show a 25% drop for gross receipts compared from one quarter in 2020 to 2019, along with 60% of the funding being spent on the payroll to qualify for full forgiveness.
One major change to the PPP loans with the updated package is a more centered approach toward minority-owned businesses, with $12 billion being funneled to small community banks, credit unions and community development financial institutions to ease financial stress on those companies.
Other adjustments include higher loan amounts for food service and accommodation businesses that will be calculated by multiplying the average payroll by 3.5, along with more flexibility for non-payroll expenses like operation costs, property damage not covered by insurance and costs related to COVID-19 guidelines.
Burgess said that anyone who applied for a PPP loan during the spring is eligible to obtain another one as long as they abide by the listed regulations, and is actively encouraging local business owners to start getting their records together so that they will be ready for the application process.
While Burgess said she believes that Vance County as a whole has responded well to the pandemic, she understands that every business was affected differently and is optimistic that the COVID-19 relief package will provide them the financial aid needed to sustain day-to-day operations.
“Some small businesses that were essential ended up staying open and did well during the pandemic, but there were others that had to close,” Burgess said. “Restaurants had to take everything curbside or operate at such a reduced amount that it was hard to make a profit, so hopefully the PPP loans end up helping them out.”
Burgess added that many businesses had issues with getting approved for a PPP loan earlier this year with several changes that were made to the process by the Small Business Administration, but she does not envision similar struggles after reading the current guidelines of the new relief package.
Along with more rules designed to prevent large corporations from getting a PPP loan, Burgess believes that the relief package will be enough to help small businesses stay afloat until herd immunity is achieved from the vaccinations and hopes to see many local residents take advantage of the opportunity.
“I think these loans will give businesses a cushion and help keep people on staff,” Burgess said. “These people need jobs, especially in Vance County, and we do not want to see them lose those jobs because a business can’t afford a full staff. The federal government has stepped up this time, and if you qualify, then definitely talk to someone who can help you out.”
The current deadline to apply for a PPP loan is March 31, 2021.