The size and scope of the Paycheck Protection Program (PPP) is coming into sharper focus, with some 56 percent of business executives saying their companies had sought funds.
The $660 billion initiative under the CARES Act is designed to protect small businesses and their employees, and a survey by the American Institute of CPAs found the PPP was far and away the most popular form of pandemic-related aid sought.
Some 35 percent of survey respondents said they hadn’t applied for government relief.
In the above chart, respondents could check all categories that applied, so the numbers do not add up to 100 percent. The “other” category includes advance Medicare payments, employer payroll tax deferral, employee retention credit and nonprofit grants, among other items.
“The overwhelming majority—92 percent—of executives in our survey said their companies had been impacted negatively by the pandemic,” Ash Noah of Association of International Certified Professional Accountants said in a statement. “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.”
Sixty-one percent of survey respondents said their companies had kept their employment levels and pay structure intact, presumably in part due to the widespread use of PPP and related programs. Others had furloughed or laid off employees or instituted pay cuts, among other tactics.
The above chart was also “check all that apply.” 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
“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,” said Erik Asgeirsson, president of CPA.com, the AICPA’s business and technology arm. “The Economic Outlook Survey data suggests that approach has been largely effective.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
