PPP restrictions, ongoing expenses, and cash-flow issues threaten America’s economic recovery

May 27, 2020 – America’s Recovery Fund Coalition (ARFC) today released a new analysis that paints a troubling picture for the American economy. Businesses with fewer than 500 employees are facing an estimated $300 billion to $1.2 trillion in damages incurred over the last two months. At this time, over 2 million businesses could be at risk of going out of business immediately. These findings demonstrate a dire need for more aggressive fiscal support from Congress now.

“While PPP was a good initial response, we need more. Small business payrolls totaled just 20 percent of small business receipts in 2017 and generally represent between 30 to 40 percent of total business expenses,” said Trevor Hanger, research director for ARFC. “An unprecedented pandemic that forced businesses to fully close or radically restrict normal operations should be met with an unprecedented federal response. Without help, 2 million small businesses could close their doors forever. Payroll support only works if businesses can stay open.”

America’s Recovery Fund would give businesses certainty, providing grants to fill the gaps between expenses and revenue, using a simple, easy-to-use application. It would be available across many industries, creating a fund that helps restaurants, retail, gyms, salons, and many others, immediately.

“Our findings show 2 million small businesses could be at immediate risk of closing without help. We do not have time for an industry-by-industry approach,” added Hanger. “We need big, bold ideas that meet these unprecedented challenges head on, and quickly, injecting cash into the economy and giving businesses a lifeline so they can rehire and keep staff, change inventory, create new spaces to adhere to social distancing, and figure out how they are going to stay in business for the long run. We need America’s Recovery Fund.”

Report Findings:

  • Businesses with fewer than 500 employees are facing an estimated $300 billion to $1.2 trillion in damages incurred over the last two months.
  • At this time, over 2 million businesses could be at risk of going out of business immediately.
  • Small business payroll totaled just 20 percent of small business receipts in 2017 and traditionally payroll, including non-wage benefits, represents 30 percent of total business expenses.

The analysis examines payroll costs for businesses with fewer than 500 employees, estimated business overhead, PPP capital support, and short-term reserves of cash, inventory, and marketable securities. View the complete analysis here.

About America’s Recovery Fund Coalition

America’s Recovery Fund Coalition represents 45 percent of the United States workforce. With more than 100 members across retail, restaurants, theaters, gyms, salons, real estate, the travel industry, financial services, construction, and equipment suppliers, we represent a combined 58 million American workers. We are asking Congress for support to help our businesses, workers, and communities recover. Learn more at www.AmericasRecoveryFund.org