About a third of small businesses in a Federal Reserve survey said that without government aid, they probably won’t make it until the end of the pandemic recession, The New York Times reported Wednesday.
The Fed survey of roughly 10,000 small businesses was conducted last fall, before Congress passed a $900 billion relief bill in December – but also before another wave of business slowdowns and shutdowns this winter driven by the resurgent coronavirus.
The Paycheck Protection Program, one of the primary means for getting federal aid to small businesses, appears to have had a noticeable effect on the business owners, the survey showed, with 77% of those who received forgivable loans saying they tried to rehire employees, compared to 44% of those who were turned down for funds.
“The new data comes at a time when some economists are questioning the efficiency of the small-business loan program as a job retention tool,” the Times said. “Most of the $325 billion in small-business assistance in the relief package approved by Congress in December is earmarked for a modified version of the Paycheck Protection Program, but future small-business relief may take a different form.”