Many Iowa small businesses don’t know where they are in federal loan application process

A new survey of Iowa small businesses shows 80 percent that have applied for federal financial assistance are waiting and many do not know where they are in the application process.

Small business owners were asked about the Paycheck Protection Program and the Economic Injury Disaster Loan on April 17, the day after the programs ran out of money.

About 20 percent said their applications were fully processed with money deposited into their bank account.

The survey was conducted by the National Federation of Independent Business. About three-quarters of small business owners - almost all employer businesses - have submitted an application for a PPP loan as of April 17.

If spent correctly, the loan turns into a forgivable grant given certain conditions.

Most small business owners are planning to take full advantage of loan forgiveness rather than using the funds as a low interest loan over two years, the survey said.

Roughly half of small business owners who submitted a PPP application expect the entire loan to be forgiven after the eight-week window, and another 27 percent expect to have at least 75 percent of the loan forgiven.

Only 3 percent plan to use more than half of the money as a low-interest loan.

Also among the survey findings:

' Most small business owners believe it will take beyond 2020 to recover from the economic impact of COVID-19.

' Only one-third of small business owners believe their community will get back to a normal level of economic activity by the end of this year.

' A quarter of owners believe it will not be until 2022 or later before the economy returns to normal.

'These survey results are not surprising,” said Matt Everson, NFIB state director in Iowa.” I have been talking with small business owners every day, and many who are the most desperate for funding are not getting the help they need to survive this crisis.”

The survey was conducted with a random sample of NFIB's membership database of about 300,000 small business owners. The survey was conducted by email on April 17 and NFIB collected 885 usable responses.