Small Business Owners Advised To Get Ready Now For Next Round Of COVID-19 Stimulus
Congress appears poised to pass a second round of the Paycheck Protection Program, or PPP, later this week.
Maryland small business owners are being advised to get their ducks in a row now to improve their odds of not getting shut out of the PPP this time around.
The Paycheck Protection Program has been a crap shoot for small business owners. During the first round, David Miller, who is a certified public accountant in Towson, said one of his clients applied for it on the first day, and had the money in a little over a week.
“However you also heard the stories about people who filed the very first day and still haven’t heard a word,” Miller said.
The initial $349 billion Paycheck Protection Program ran out of money in about two weeks.
The PPP offers loans through banks to small businesses. But those loans will be forgiven if the business keeps its employees on the payroll for eight weeks. Besides salaries, the money can be used to pay rent, mortgage interest, or utilities.
Attorney Charles Kassouf, who has a practice in business and corporate law, said one reason some business owners never heard back about their loan application is that bankers are overwhelmed.
“I think it’s a matter of getting through those applications and also a matter of the program being funded again,” Kassouf said.
Kassouf and Miller took part in a webinar Baltimore County’s Economic Development Office held on Tuesday. Small business owners emailed questions. They asked how they can work their way through the maze of multiple state and federal programs that are out there to help them deal with the economic disaster brought on by the COVID-19 pandemic. Many of the questions were about the Paycheck Protection Program.
Baltimore County Economic Development Director Will Anderson said the program funneled about $6.5 billion into Maryland businesses before money dried up.
“And when we look at the size of Baltimore County’s economy, we can roughly estimate that perhaps a billion dollars made it into our county businesses,” Anderson said.
But that’s only around two percent of the county’s economy. And here are some numbers that go a long way toward explaining why more than 46,000 people have filed for unemployment in Baltimore County in the past month.
Anderson said 50 percent of the people working in the county have jobs in small businesses. 63 percent of Baltimore County businesses surveyed by Anderson’s office report they need financial help.
Earlier this month, economist Anirban Basu, who produces WYPR’s Morning Economic Report, warned the county’s economic advisory committee there will be a lot of empty storefronts in Baltimore County.
Now that it appears Congress is about to restart the Paycheck Protection Program, Miller said small business owners need to get ready now.
“I’m telling all of my clients this week, let’s use this as an opportunity to fine tune your quick books, fine tune your payroll reports and make sure we have everything set so when the application process opens again you can be first in line,” Miller said.
What you don’t want to do, he said, is fill out your application incorrectly and have it kicked back to you. Keep in mind there are no guarantees the next round of stimulus from the federal government will be enough, so you need to look for every advantage.
Also, down the road, small business owners will have to prove they spent the PPP money properly in order to have the loan forgiven. Miller said that’s another reason to get your record keeping act together.
“A lot of clients are thinking they got the loan, great, it’s all going to be forgiven,” Miller said. “But I caution them that the paperwork at the end may be more daunting than the paperwork at the beginning.”
You can find information on the Paycheck Protection Program and other federal and state programs at baltimorecountybusiness.com.