Now that those programs are over, some expect a turn toward more bank loans. The SBA distributed nearly $416 billion in emergency relief aid to 6 million small businesses through the PPP program, Restaurant Revitalization Fund, EIDL program and other programs in 2021. Chamber of Commerce, but the pandemic changed that with the Paycheck Protection Program and EIDL loans. Small businesses historically lean heavily on credit cards or family and friends for capital, said Tom Sullivan, vice president of small business policy at the U.S. According to the SBA, 29.3% of small businesses have sought EIDL loans since May 2020, while 9.5% sought bank loans. Chamber of Commerce, nearly half, or 45%, said they have taken out a loan to manage higher costs caused by inflation. To deal with higher costs, more businesses are taking out loans. Other recent surveys from the National Federation of Independent Business and Goldman Sachs have presented a similar portrait of the Main Street outlook in an inflationary economy. Inflation is at a 40-year high, and in the most recent CNBC|SurveyMonkey Small Business Survey for Q1, 47% of small businesses said they were passing price increases to customers, another 32% indicate they will have to raise prices soon if inflation persists (they think it will), and only 33% described business conditions as good. With the cash infusion and new products coming, "I am more optimistic now than I was last year," she said.īut the EIDL loan program has ended, while higher costs due to goods inflation, supply chain struggles and rising wages, all remain issues challenging the financial picture for small business owners. "EIDL is the only reason we're still in business frankly," Krimmel said. To ease the pressure, Krimmel applied for the Covid Economic Injury Disaster (EIDL) loan, $150,000 in the first round and half a million in the second round, which the business used to turn things around, stock up on fabric, buy extra inventory and pivot with some new products. It's just it's really pressure from all sides," she said. "For small business, having to invest in so much inventory it means our cash flow is tied up.
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