Some 56 percent of business executives said their companies had sought relief funds through the Paycheck Protection Program (PPP), a $660 billion initiative under the CARES Act designed to protect small businesses and their employees, a survey by the American Institute of CPAs found.
The PPP was by the most popular form of pandemic-related aid sought, followed by the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program at 8 percent, according to the latest AICPA Economic Outlook Survey, topline results of which were released last week.
Thirty-five percent of survey respondents said they hadn’t applied for government relief.
Most Companies Were Impacted Negatively by The Pandemic
The AICPA Economic Outlook Survey polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.
Two-thirds of the companies these executives represent are privately owned entities, with the rest a mix of publicly listed companies and not-for-profits.
“The overwhelming majority – 92 percent – of executives in our survey said their companies had been impacted negatively by the pandemic. The survey results give a snapshot of how they’ve coped so far, with many relying on a mix of relief programs, cost containment and business continuity strategies.”
Ash Noah, CPA, CGMA, managing director of CGMA learning, education and development for the Association of International Certified Professional Accountants
Sixty-one percent of survey respondents said their companies had kept their employment levels and pay structure intact, presumably in part because of the widespread use of PPP and related programs.
Others had furloughed or laid-off employees or instituted pay cuts, among other tactics.
For the “other steps” category, respondents listed such examples as:
- Reduction in force for indirect and support areas.
- Reduced hours, OT hours, 4-day workweeks.
- Merit increases, bonuses, profit-sharing eliminated.
- Salary freeze, hiring freeze.
- Eliminated contractors, offered early retirement.
- Bonuses, hazard pay, premium pay, thank you bonus, stay bonus.
- Product offerings revised.
The AICPA and a small business funding coalition it leads are strong advocates of the PPP and worked to help speed and simplify its implementation through a series of recommendations and the development of loan application and forgiveness calculators for the program.
“Our stance from the beginning was that it was vital to get money into the hands of small businesses quickly to ensure that their lights stayed on and their employees were protected. The Economic Outlook Survey data suggests that approach has been largely effective.”
Erik Asgeirsson, president of CPA.com, the AICPA’s business and technology arm
Still Over $130 Billion Remaining in PPP Loan Fund
With states slowly opening up their economies and questions about how loan forgiveness would actually work, interest in the PPP loan has diminished.
There are still over $130 billion remaining in the PPP loan fund to help small businesses to cover payroll during this time.
With the recent passage of the PPP Flexibility Act, the AICPA is encouraging pandemic impacted businesses to apply for the loan program as the deadline for PPP loans will be June 30.
Connect With Us And Other Small Business Owners
Please head over to our Facebook Group for Small Business Sellers and interact with other small business owners.