The federal Paycheck Protection Program (PPP) loans allowed many small businesses in the U.S. to retain their employees. But now, many of them have spent most or all of their loans. After lowering their business costs to survive reduced income due to the COVID-19 pandemic, they do not have many options left but to layoff some employees including those that they previously rehired.
Under the current program, borrowers can no longer request for more funds. They can only do so if the next stimulus plan gets approved. But the White House and lawmakers have yet to agree on a success stimulus program that will include supplemental benefits for unemployed Americans.
A Cornell University survey found that one in four employees rehired thanks to PPP was already told by their employers that they might be laid off again. Another survey conducted by the National Federation of Independent Business, almost half of the small businesses said they need additional financial assistance over the next year.
Fears of unemployment can already be seen in weekly and other high-frequency employment data. These include the increase in filings of state unemployment benefits for two straight weeks. Data from Homebase reveal a decline in the number of employed people at the start of July. Google workplace mobility data shows the same trend.
