(AmericanProsperity.com) – According to the US Small Business Administration (SBA), around 30 million small businesses operate within the United States. This makes them integral to society and vital to the economy. However, with the current COVID-19 pandemic and the recession, many may not survive through the year.
The Numbers Don’t Look Good
In a survey conducted by Small Business for America’s Future, over 1200 small businesses were questioned about debt, layoffs, and policy. Among these businesses, 53% of respondents took on new debt during the COVID-19 crisis. Of those respondents, over 18% took on over $100,000 worth of new debt.
Almost 25% of small businesses surveyed have considered closing due to the pandemic while 12% may face bankruptcy. These staggering numbers do not bode well for the unemployment rate in the coming months or the long-term health of small towns across America.
PPP Has Helped
Even with all the bad news, additional funding into the Paycheck Protection Program (PPP) has helped to ease the burden placed on small businesses.
The Paycheck Protection Program has been a tremendous success for small businesses and the American workforce. pic.twitter.com/CfpzBucf6j
— The White House (@WhiteHouse) June 18, 2020
With this, many small business owners are wondering what will happen if they do not pay back loans received under the PPP or if they file for bankruptcy. While most are expected to be forgiven if done correctly, many of these loans were filed in haste.
If any discrepancies are found on their original loan paperwork, they could be forced to pay back these loans. The penalties could go so far as to seize personal property.
Fraud and Abuse Protections
Transparency measures will help to keep bad actors from taking out loans they don’t need. The Treasury Department and SBA will disclose a great deal of information regarding loans over $150,000 received through the PPP, including:
- Demographics of loans
While this will help bring any potential mismanagement to light, millions of small businesses will be under the microscope and could be audited, further increasing the current pressures.
— Treasury Department (@USTreasury) June 19, 2020
With the uncertainty on the horizon, there are companies stepping in to help. Visa has launched a 5-year, $200 million small and micro business campaign to help support struggling companies. On June 22, Visa also announced resources to help businesses move online and encourage no-touch payments.
.@Visa’s ability to move money seamlessly between consumers, businesses, banks and governments is critical to supporting global economic recovery. 4 key actions we are taking to accelerate this support: https://t.co/aOJKDKHh1V pic.twitter.com/rTVn3nefH0
— VisaNews (@VisaNews) May 5, 2020
Using services like these, some small businesses may be able to survive. Without the major resources of a large company, they rely on their own ingenuity and resources to keep going.
Amidst all of this, President Trump has made it a priority to keep small businesses afloat as well as he can. While the administration has streamlined loan programs, postponed tax day, and helped businesses minimize costs, its efforts still may not be enough.
However, it’s not just up to the government to fix this problem. The American people need to step in to secure their own prosperity and future. Shopping local and buying USA-made products keeps money flowing through the economy into the pockets of neighbors, friends, and family, rather than to multi-billion dollar corporations.
~Here’s to Your Prosperity!
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