Construction tops industries in PPP stimulus loan funds, but still needs additional funding | Dump Trucks Charlotte NC
Columbus Ohio Dump Truck Company Brief:
- The U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP), which allowed for a cap of $349 billion in loans to small qualifying firms in need due to the coronavirus outbreak, ran out on April 16.
- As of April 13, the construction industry had received 114,838 loan approvals, totaling just under $34 billion — more than any other industry. Around 14% of the $247.5 billion spent as of the 13th went to small business contractors.
- Many small contracting firms secured loans, according to Kristen Swearingen, vice president of legislative and political affairs for Associated Builders and Contractors (ABC), adding that construction's penchant for receiving the loans likely had to do with the industry widely being considered an "essential" business among this period of mandatory business shutdowns.
- Though the program's funds ran out in just 13 days, it's “just a matter of time” before more money gets added to the program, according to Peter Comstock, ABC’s director of legislative affairs.
Dump Trucks Columbus OH Insight:
Small businesses must have 500 or fewer employees or qualify with the SBA’s guidelines in order to get loan approval.
Once secured, recipients must maintain payroll costs first, and remaining funds available can be used for most mortgage interest, rent and utility costs for the period of eight weeks after the loan is received. If they maintain existing employee and compensation levels during that period, recipients can apply for full loan forgiveness.
Both Comstock and Swearingen said ABC members communicated ease in getting the necessary forms filled out and in receiving the loan from banks. However, columbus oh dump truck company who were members of local banks had more success than those who went to larger banks, such as Wells Fargo, because those banks quickly hit their cap due to the immensity of demand targeted on them.
A total of 4,664 banks provided the $247 billion total as of April 13, and 70% of loans approved were for less than $150,000.
The form-filling process was easy, according to Matt Pincus, president of Pincus Elevator Company, Inc. and ABC member. Pincus was able to secure the loan for his 31 employees within a week, he told Construction Dive. Even then, however, Pincus said that a loan for eight weeks is just a "short-term bandage" for his company, which does contracting columbus oh dump truck company in Pennsylvania, New Jersey and Delaware, which are among the states with some of the strictest construction shutdown policies.
“We’re like every contractor and every other subcontractor, we have other expenses this isn’t even covering,” he told Construction Dive. Pincus said he's glad nobody needs to be laid off, thanks to the loan, and that his firm can use portions of the funds elsewhere, but laments that the loan does not cover expenses such as invoices or leases on trucks and equipment, especially considering that the lack of columbus oh dump truck company means there's no revenue to provide cash flow.
As of April 13, Pennsylvania’s roughly 36,000 total approved loans landed just under $10 billion, while New Jersey’s roughly 17,000 neared $6 billion. Texas accounted for the most loans and highest total amount, at just over 88,000 loans worth $21.8 billion.
“Obviously the fact that the program ran out of money so quickly means that there was incredible demand for it,” said Matthew Turkstra, director of congressional relations for tax, fiscal affairs and accounting at Associated General Contractors of America (AGC). “That points to the fact that it was well intended and focused on a good cause.”
The government still needs to recognize the importance of the aid already provided and re-up the funds, Turkstra said, which he anticipated would happen sometime in the next week. In terms of ease in the application process, it ran the gamut for AGC members, he said, adding that it definitely mattered which lender a contractor was able to turn to, as some hit their cap due to more customers and higher demand, or not be among those preapproved to give loans by the SBA.
It’s also important to note that getting approved for a PPP may mean a small business won’t qualify for payroll tax deferral from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Construction Dive reached out to the SBA for comment but did not receive a response by the time of publication.