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 May 1:
- Small business owners facing difficult road to getting PPP loan forgiven
- Nearly half of CFOs not planning for second wave of COVID-19 pandemic
- COVID-19 pushing workers into early retirement
SBOs concerned about PPP loan forgiveness
“Probably every PPP borrower expects their loan to be forgiven, but it is not that simple.”
For the small business owners who were able to secure funding through the Paycheck Protection Program, concerns are beginning to emerge about how much of the money will have to be paid back — and how that sum will be determined.
The terms of the legislation dictate that 75% of the loan must be used on payroll-associated costs within the first 2 months. Money spent on non-qualifying items must be repaid within 2 years.
Few banks, however, are able to give their borrowers guidelines on how this will all play out in reality. The timeline for rehiring employees and questions about what kind of paperwork is required are 2 of the issues that could cause confusion down the line.
42% of CFOs not planning for second wave of COVID-19
“As CFOs attempt to project 2020 revenue and profits, it’s surprising that 42% are not baking a second wave of COVID-19 into any of their scenarios.”
A recent survey by Gartner found that a second wave of COVID-19 infections isn’t necessarily playing into the majority of CFO’s plans for the future. In fact, only 22% of CFOs have even factored another round of forced closures into their “most-likely scenarios” for the future.
Even so, of all the CFOs surveyed, only 4% report that they are imminently requiring all employees to return to work.
COVID-19 pushing workers into early retirement
“It’s possible that the exit of older workers will be permanent, eventually leading to more work opportunities for younger adults.”
As the number of unemployment claims has spiked over the past month, the U.S. has experienced a significant and simultaneous drop in the number of people looking for work. New research indicates that this can be explained by a growing number of people choosing early retirement due to the COVID-19 pandemic.
While it’s possible that workers could come out of retirement once the global health crisis is over, older people are generally more at risk of serious complications from the disease and, therefore, more often subject to extended stay-at-home orders or workplace precautions.