small business

The House and Senate have both passed a bill that would alter the SBA’s Paycheck Protection Program. Businesses will now have up to 24 weeks to use forgivable funds, instead of the original eight weeks. The portion of the costs that must be spent on payroll has been reduced from 75 percent to 60 percent. The bill also changes many of the original legislation’s hard deadlines from the end of June to Dec. 31. The legislation needs to be signed by the president before going into effect, and the SBA will need to write new guidance to clarify the impact of the changes on eligible costs and forgiveness.

SBA released data on the Paycheck Protection Program (PPP) this week for all approved loan activity through April 13 and told banks Wednesday night that the program is nearly out of funds. The data show more than 1 million loans worth more than $247 million approved across all states and territories. While the average loan is $239,000, 70 percent of the loans are less than $150,000. On average, states are seeing 3.1 loans per 1,000 population and nearly $747,000 per 1,000 population. While Texas (88,434) has seen the most loans, many Great Plains states are leading in per capita terms, with North Dakota (10.8 per 1,000 population), Wyoming (9.9), Montana (9.7), Nebraska (9.6), and South Dakota (9.0) comprising the top five. State data is in the table below. Looking at NAICS subsectors, construction is receiving the most loans with nearly 14 percent of approved funds, followed by professional services and manufacturing (each at 12 percent). According to SBA data (xls), accommodations and food services accounted for nearly 20 percent of 7(a) loan (the parent program of the PPP) volume over the past three years, but are just 9 percent of the PPP approved PPP loan volume.

The fallout from COVID-19 is growing as unemployment numbers skyrocket, small businesses are faced with closures, and employers try to protect both their business and employees. A just-released national study conducted by America’s Small Business Development Centers (SBDC) and Thryv Inc.,  found that 69 percent of U.S. small businesses have already experienced a large drop in demand due to the coronavirus pandemic and 60 percent believe demand will continue to decline. States, too, have seen their budget situations take a dramatic turn and universities have had to send students home. Below you will find some of the resources available to businesses and universities in dealing with COVID-19 pressures, as well as new funding opportunities from federal agencies for those seeking assistance. For more information on how states are responding, several organizations are posting daily updates and are referenced below. 

The resources listed are divided into help for small businesses, updates on states' reactions, and federal resources. Please click through on the read more link for a brief synopsis of each resource followed by more information below the bulleted list. 

A report released last fall on the financial stability of U.S. small businesses in 25 metros has been given new context as attempts to slow the coronavirus pandemic have brought a majority of in-person commerce to a halt across communities, the country, and the globe. The JP Morgan Chase report found that 29 percent of small businesses were unprofitable and 47 percent had less than two weeks of liquidity. The situation was worse — often twice as much — in communities with lower-than-average home values, college graduates, or majority minority populations.

The share of the nation’s economy stemming from small businesses — “the lifeblood of the U.S. economy” — has waned since 1998, according to a new report by Kathryn Kobe and Richard Schwinn on behalf of the U.S. Small Business Administration’s Office of Advocacy. Despite overall growth in small business GDP, the number of small businesses and their employment levels have not yet recovered from their pre-recession value. At the same time, the numbers of large businesses and large business employees have grown continuously, and large business GDP makes up an increasing share of the national pie.

Companies employing more than 5,000 people represent nearly two-thirds (63.9 percent) of all business R&D in the United States, according to an analysis of NSF’s Business Research, Development, and Innovation Survey (BRDIS). With the recent release of more detailed numbers and to expand on a Useful Stats report from earlier this year, this analysis focuses on business R&D by company size. Small and mid-sized companies made up the highest share of business R&D in Alaska, New Mexico and Louisiana. In Delaware, Michigan and Oregon, large companies made up the highest share of business R&D.

The Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) has launched the third round of the Small Business Vouchers (SBVs) pilot program. In this round of funding, DOE will commit up to $5 million in technical assistance from DOE national labs to help bring the next generation of clean technologies to market in nine technical areas of interest. Proposals are due November 10. For the third round, EERE hopes to increase new small businesses collaborating with the DOE national laboratories. As such, small businesses with little to no experience working with the DOE national labs are strongly encouraged to submit requests for assistance.

The Department of Energy (DOE) recently announced that 43 small businesses had been selected to participate in the second round of its Small Business Voucher (SBV) pilot project, and was collectively awarded more than $8 million for a wide range of R&D clean energy, public-private sector innovation activities. The winning businesses will have the opportunity to collaborate with 12 DOE labs, as well as access to world class facilities and expert advice from renowned scientists and engineers to bring their clean energy technologies to market. The DOE laboratories scheduled to work with the awardees will offer their support and resources to commercialize clean energy techs involving advanced manufacturing, bioenergy, buildings, fuel cells, geothermal, solar, vehicles and water. Nearly $15 million in SBVs have been awarded in Rounds 1 and 2. The first SBV pilot took place in the fall of 2015 and involved 33 small businesses. Information involving Round 3 of the SBV program is expected to be released in October.

On July 25, the Small Business Administration (SBA) released a framework that allows qualifying small and disadvantaged businesses to obtain developmental assistance from mentor companies (both large and small businesses) and form joint ventures with those mentors to pursue government contracts. The new small business mentor-protégé program allows mentors to provide technical/management assistance, financial assistance, trade education and/or assistance in performing prime contracts with federal agencies through joint venture arrangements for up to three years. Under the rules of the program, mentors may own up to 40 percent of the protégé. Mentors may have up to three protégés under the new program. Read the final rules…

The Department of Energy (DOE) announced that it is accepting applications for the first round of its Small Business Vouchers Pilot (SBV) program. Under the SBV program, the DOE will commit up to $20 million in technical and research assistance awards to help small businesses bring next-generation clean energy technologies. Companies may apply for and receive up to $300,000 in assistance from U.S. Department of Energy national laboratories nationwide. Assistance will be offered in nine topical areas and can range from materials development to modeling to prototyping and scale-up, and much more.