Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
Small Business News Highlights for April 28:
- Paycheck Protection Program loans over $2 million to be audited by Treasury Department
- Small business owners report difficulty and confusion about how to use PPP funds
- Survey shows nearly 90% of Americans are worried about economic collapse
U.S. Treasury Department will audit PPP loans more than $2 million
“Particularly in communities that have been hardest hit, we make sure they’re going to get that money. We’re going to do what we need to do to make sure everybody is treated fairly in this program.”
As statistics emerge about the newest round of the Paycheck Protection Program (PPP) loans, Treasury Secretary Steven Mnuchin has indicated that the loans were never meant for large, liquid companies — and that the average amount of the loans this round will decrease significantly.
Secretary Mnuchin also estimates that the PPP will help approximately half of the country’s private workforce and that loans worth $2 million or more will automatically be audited by the Treasury Department and that borrowers who violate the “good-faith” nature of the program will face steep fines and jail time.
Small businesses struggle to use PPP loans
“In some ways, they really put these small businesses in a very compromising position because they could end up in a situation where they go out and spend dollars to bring people back on the payroll, which ultimately will not be forgiven at the end.”
Small business owners who have been able to access funds through the PPP report that the trouble doesn’t end once the money hits their bank account. Provisions of the PPP require that 75% of the loan value be used towards employee payroll, a difficult task for businesses that are forced to close to the public and have no use for day-to-day employees. In fact, some SBOs have come to see themselves as an extension of the unemployment office, paying employees who aren’t actually putting in many hours on behalf of the company.
90% of Americans worried about economic collapse
“When you force one question over the other, health is still more important, over the economy. But that’s going to start changing.”
Even so, the data suggests that Democrats have a lower tolerance for easing restrictions and reopening the economy, a theme that is reflected in the partisan differences to lifting stay at home orders.