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PPP loans help save millions of jobs, but the money is almost gone

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PPP loans help save millions of jobs, but the money is almost gone

The surprising jobs rebound in May, which sparked hopes for a quick recovery from a pandemic recession, is almost certainly in large part due to tens of billions of dollars in government loans that can be forgiven for small businesses.

Known as the Paycheck Protection Program, the initiative – part of a much larger COVID-19 aid package implemented by Congress when the pandemic first stormed the economy – has so far lent more than $ 512 billion to small businesses that are struggling, including around $ 67 billion within California. The money does not need to be paid off if funds are used to keep workers on the payroll and other conditions are met.

New ideas to prevent layoffs have no precedent in past economic crises.

And without it, businesses like Dune Coffee Roaster in Santa Barbara would not be able to return most of the 48 employees on leave when the plague struck.

That is important now because the program will expire soon and neither President Trump nor the Republican congress will show interest in new aid.

The owner of Dune Coffee, Julia Mayer, was one of the earliest PPP loan recipients in mid-April. She said it was a gift, keeping the business alive which she and her husband financed in 2009 with a credit card and $ 5,000 from her grandmother. It has grown to three stores and sold $ 4 million last year.

But the mayors and many other borrowers will run out of PPP funds at the end of the month. The big worry is that many people will not be able to continue to pay their workers when they reopen in the face of a serious pandemic.

“We are headed for a financial gap,” said Sarah Crozier, a spokesman for Main Street Alliance, a small business advocacy group.

A solid recovery in the labor market is essential for a healthy and sustainable recovery in the economy as a whole. Small businesses, or those with fewer than 500 employees, accounts for nearly half of national employment.

The PPP loan is designed to cover employer payroll costs in only about eight weeks, functioning as a temporary replacement until everything returns to normal. Now, it seems that legislators are seriously overestimating how quickly the country will return to “normal.”

Even as countries begin to reopen their economies, significant business restrictions remain in many places. And current data shows that parts of the United States that initially saw relatively few cases of coronavirus now lead the country in new infections.

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In such circumstances, it is not surprising that many consumers remain afraid of being infected and are reluctant to get out like they used to.

Despite a strong return in consumer spending last month, profits still left overall retail sales far below last year’s level. And even with one month’s repairs, most businesses are not near where they were before the health crisis.

Sales are only half of last year at Dune Coffee. “The only way we do what we do is because we have it [$350,000] loans that help us, “said Mayer, 40, adding that two of his landlords also reduced rent. But” we are quite a lot “from PPP money, he said.” We will have one more payroll process and that’s it. And that’s a little scary. “

On June 12th, nearly 4.6 million businesses received PPP loans totaling more than $ 512 billion, according to the Small Business Administration, which runs the program. About two thirds of borrowers can use all their loans results at the end of June, according to a survey by the National Federation of Independent Businesses, a lobby group for small entrepreneurs.

PPP is a big “wild card” for the labor market, said Bernard Yaros, an economist at Moody’s Analytics.

According to his calculations, it was PPP that largely explained unexpectedly good work reports earlier this month.

While analysts expect around 7 million fewer payroll jobs in May, preliminary data from the Bureau of Labor Statistics show an actual net increase of 2.5 million jobs. The unemployment rate fell to 13.3% in May from 14.7% in April, although officials said the second figure of the month downplayed the number of people laid off and considered unemployed.

In addition to rising employment, stronger-than-expected retail sales in May and increasing consumer confidence and manufacturing measures have boosted hopes for a quick recovery from what is likely to be the biggest quarterly collapse of economic activity in the U.S. history.

But even with the job rebound in May, payroll employment remained nearly 20 million below the level in February before the pandemic.

And while most of the huge job shortages are estimated to be on leave – nearly 80% of workers expect to be withdrawn – Federal Reserve Chair Jerome H. Powell noted last week that there might be “deep into the millions of people who cannot return to work their old. “

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Yaros estimates that PPP has protected around 16 million jobs so far. There are still around $ 130 billion in PPP money that needs to be lent. And government managers have made some improvements in reaching smaller and more vulnerable businesses in the last few weeks.

Initially, the program sparked a fire because it spent money on several large publicly traded companies and rich organizations, including the Lakers. (The team then repays a $ 4.6 million loan.)

The SBA said the average number of all PPP loans had dropped to around $ 111,360 – from almost double that amount in the initial busy schedule when the program was launched in early April.

However, most of the 30 million small businesses in the US have yet to obtain PPP loans, some of which may be impeded by bureaucratic hassles and other obstacles.

After analyzing PPP data, Beth Ann Bovino, chief US economist at S&P Global Ratings, said The program can save more work if more loans are given to industries that are most disadvantaged by a pandemic, such as food services.

“The basic message behind PPP is that workers are tethered somehow to jobs, to businesses, so that when the door is wide open there will be jobs to return,” he said. “If that is the hope of this program, yes, it might fail because industries that are more directly affected by social distance don’t get [proportionate amount of] Loan.”

Other studies show that businesses belong to Black and Latino has been devastated by the pandemic. The Small Business Administration has not provided data on the race, gender, or size of the PPP recipient companies, and officials have not responded to questions about these statistics.

Ana Remos, a Latina in Miami who co-founded azureazure.com, an online bilingual lifestyle magazine, gets a PPP loan of $ 75,000. It initially included payroll for four employees, but the loan money was almost gone.

And with advertising revenue for his website falling almost to zero, Remos said he had to let go of his most expensive employees – the webmaster and the company’s technical builder. He was afraid that he might soon terminate his English and Spanish editors.

“This PPP loan must be expanded. “Two months is nothing, not just for me but for anyone to get back up,” said Remos, whose business has invested $ 35,000 to build a new platform and was just getting ready to launch a big redesign when the pandemic struck. “We need at least two more months.”

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Congress has relaxed the PPP rules and conditions to make it easier for businesses to qualify for loan forgiveness. And lawmakers are considering another round of pandemic relief measures, but it is far from clear whether it will include additional PPP funding or changes to regulations that will allow previous borrowers to submit more money.

At present, the deadline for PPP applications is still 30 June. “Instead of other short-term solutions, Congress really needs to focus on a comprehensive program for the next few years,” said Crozier of the Main Street Alliance.

For now, the question for many entrepreneurs is whether they can survive until there is more financing or enough business to increase so they can avoid more layoffs.

“Three quarters of [business] respondents stated that they only had enough cash to cover the costs of two months or less, “according to a survey in a paper published by the National Bureau of Economic Research.

“If the crisis lasts 4 months, not 1 month, only 47% of businesses expect to open in December compared to 72% in a shorter duration,” the survey found.

Tina Lyons, 53, owner of Double River Forwarding in Portland, Ore., Earns a living by helping businesses send containers of products to other countries. The biggest customers are agricultural businesses that export straw, wheat, soybeans, hazelnuts, and other goods.

Even before COVID-19, the US-China trade war and a series of tit-for-tat tariffs made last year’s the worst in its 12 years of operation. And this year looks worse.

Thanks to a $ 33,000 KPS loan, he retains three of his four workers. But with the closure of ports in some countries and people not saving much, Lyons said his business was only a third from last year. He had already told his employees that they might reduce working hours in early July, when his PPP funds had run out.

“Oh, that really helps,” he said of the PPP loan, which he hoped would be forgiven 100%. “At the time, I really thought that was all we would need. I really did it. “

“But you know how it is progressing. Every week we are in a different position, or we find out more about how it will take longer than we think or it will never disappear,” he said about COVID-19’s fear. “Actually, at first I thought this would be the bridge we needed. But apparently not. “

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Portuguese historical films will premiere on 29 December.

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Portuguese historical films will premiere on 29 December.

Method Media Bermuda will present the documentary FABRIC: Portuguese History in Bermuda on Thursday, December 29 at the Underwater Research Institute of Bermuda.

A spokesperson said: “Method Media is proud to bring Bermuda Fabric: Portugal History to Bermuda for its 5th and 6th showing at the Bermuda Underwater Observatory. In November and December 2019, Cloth: A Portuguese Story in Bermuda had four sold-out screenings. Now that Bermuda has reopened after the pandemic, it’s time to bring the film back for at least two screenings.

“There are tickets Ptix.bm For $ 20 – sessions at 15:30 and 18:00. Both screenings will be followed by a short Q&A session.

Director and producer Milton Raboso says, “FABRIC is a definitive account of the Portuguese community in Bermuda and its 151 years of history, but it also places Bermuda, Acors and Portugal in the world history and the events that have fueled those 151 years.

“It took more than 10 years to implement FABRIC. The film was supported by the Minister of Culture, the Government of the Azores and private donors.

Bermuda Media Method [MMB] Created in 2011 by producer Milton Raposo. MMB has created content for a wide range of clients: Bermuda’s new hospital renovation, reinsurance, travel campaigns, international sports and more. MMB pays special attention to artistic, cultural and historical content.

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CRISTANO RONALDO CAN MAKE UP A GIANT IN CARIOCA AND PORTUGUESE TECHNICIAN SAYS ‘There will be room’

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CRISTANO RONALDO CAN MAKE UP A GIANT IN CARIOCA AND PORTUGUESE TECHNICIAN SAYS 'There will be room'

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Maestro de Braga is the first Portuguese in the National Symphony Orchestra of Cuba.

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Maestro de Braga is the first Portuguese in the National Symphony Orchestra of Cuba.

Maestro Filipe Cunha, Artistic Director of the Philharmonic Orchestra of Braga, has been invited to conduct the Cuban National Symphony Orchestra, as announced today.

According to a statement sent by O MINHO, “he will be the first Portuguese conductor to conduct this orchestra in its entire history.”

In addition to this orchestra, the maestro will also work with the Lyceo Mozarteum de la Habana Symphony Orchestra.

The concerts will take place on 4 and 12 March 2023 at the National Theater of Cuba in Havana.

In the words of the maestro, quoted in the statement, “these will be very beautiful concerts with difficult but very complex pieces” and therefore he feels “very motivated”.

From the very beginning, Rachmaninoff’s Piano Concerto No. 2 will be performed by an Italian pianist (Luigi Borzillo), whom the maestro wants to bring to Portugal later this year. In the same concert, Mendelshon’s First Symphony will be performed.

Then, at the second concert, in the company of the Mexican clarinetist Angel Zedillo, he will perform the Louis Sfora Concerto No. 2. In this concert, the maestro also conducts Tchaikovsky’s Fifth Symphony.

“This is an international recognition of my work. An invitation that I accept with humility and great responsibility. I was surprised to learn that I would be the first Portuguese member of the Cuban National Symphony Orchestra. This is a very great honor,” the maestro said in a statement.

“I take with me the name of the city of Braga and Portugal with all the responsibility that goes with it, and I hope to do a good job there, leaving a good image and putting on great concerts. These will be very special concerts because, in addition to performing pieces that I love, especially Rachmaninov and Tchaikovsky, I will be directing two wonderful soloists who are also my friends. It will be very beautiful,” concludes Filipe Cunha.

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