The Paycheck Protection Program (PPP) was intended to be a lifeline for small businesses to help cover payroll costs and keep people employed. The problem with the PPP is that the majority of a business’s costs is not payroll. It’s utilities, supplies and other types of routine expenses. Even if a company can get PPP money to keep their employees—only 13% of applications have been approved—the other costs of keeping a business open without customers are dragging them under. And if a company fails to keep at least 80% of their staff, the PPP loan is no longer forgivable. It becomes a non-forgivable boat anchor for businesses already sinking in the stormy COVID-19 waters, despite the SBA and the Treasury Department attempts to clarify and simplify the loan forgiveness rules. As a result, Forbes reports more than 163,000 businesses have closed in the U.S. since March 1.
The Emergency Injury Disaster Loan (EIDL) program, though smaller than PPP and less publicized, has not fared much better. Only 55% of small business applicants have received EIDL funds as of the middle of July, according to ProPublica.com. That’s not good news for businesses trying to keep from crashing on the Coronavirus reef. With the alarming surge of COVID-19 cases this fall, government-mandated shutdowns will only pour more frigid water into the already leaky economy.
Hope on the Horizon
Hope is not lost, however. BooksTime, an accounting and bookkeeping firm for small businesses in the U.S., has been hard at work to help their clients access government loan and grant programs. Unfortunately, BooksTime’s staff has seen first hand how many small businesses are being left to flounder. Based on BooksTime’s observations, the Forbes report may be only the tip of the iceberg, which threatens to rip a mammoth hole in the Main Street hull.
Even with the waterlogged PPP and EIDL programs within reach, most small businesses haven’t applied—often because they lack the accounting support needed to prepare a successful application.
BooksTime Offers Free Services
BooksTime, a national bookkeeping service, has a stated mission to help small businesses succeed. Since the government has failed to keep the small business owners afloat during the pandemic, BooksTime feels an obligation to do what they can to help. BooksTime co-founder Sonya Livshits put it this way: “The small entrepreneurs that are the foundation of the American economy are struggling more than any time after the Great Depression, and the Paycheck Protection Program left too many folks behind. It’s time for the small business community to band together to support those who struggle the most.
Therefore, for small businesses who were turned down for a PPP loan, BooksTime is offering basic bookkeeping services for free—no long-term commitments, no gimmicks, no catch. What’s more, BooksTime announced that they will continue to extend this lifeline until there’s a vaccine for COVID-19, helping businesses weather the storm and navigate the choppy waters toward recovery. This is an extraordinary move, especially given that the company will be giving up significant revenue—bookkeeping services, for example, Quickbooks, normally cost small businesses anywhere from a few hundred to several thousand dollars per month. “We’re willing to shoulder this cost because we know that thousands of entrepreneurs need these services to survive this difficult period, but simply cannot afford them. A lot of business leaders talk about CSR (corporate social responsibility), but too often, it’s just a buzzword—for us, it’s about making a real difference.”