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Economic Predictions: What Lies Ahead? & Changes to PPP

Economic Predictions: What Lies Ahead? & Changes to PPP

March 27, 2021
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A Message From Carol

Are you taking ownership of your life? In other words, are you spending your time intentionally, or are you allowing life to happen toyou? We can’t always control our circumstances, but we are never without control.

I choose to own my time through learning experiences and strengthening my faith—what’s important is that you do choose.

By owning your time, you’re guaranteed to find fulfillment, and success often follows that. It’s also important that you own the thoughts that pass through your mind, and filter out the ones you can’t endorse. Take my “farm art” for example (photos included). While some may “just” see pollen or pinecones, seek to see the beauty... and even learn a lesson in the process.

How do YOU own your time? What lessons are you seeking?

Economic Predictions: What Lies Ahead?

It can be easy to overlook the nation’s solid economic fundamentals when the financial media splashes stories every day about an army of amateur traders, short-selling mania, and initial public offerings (IPOs) that double in price on the first day of trading. 

But a recent survey by The Wall Street Journal showed just how upbeat economists are about 2021.1

Here’s a quick summary of the highlights.

Increased projected economic expansion. Economists now expect the economy to expand by 4.9% this year, an increase from their estimate of 4.3% last month. The forecast has brightened due to the distribution of COVID-19 vaccinations and the prospect of additional fiscal relief.

They are less optimistic about employment. The group sees 4.8 million jobs to be added this year, versus a January 2021 forecast of 5 million. There is an ongoing worry that jobs may take longer to return to certain industries, such as leisure, airlines, and restaurants.2

Brace for higher inflation. They project a 2.8% increase in consumer prices in June 2021 compared with a year earlier.

Decreased chance of an economic downturn. The economists believe there is a 17.5% chance of an economic downturn in the next 12 months, an improvement from the 21.2% risk estimate in January. Vaccines and the prospect for new federal spending are driving the optimism.

While the consensus is upbeat about 2021, it’s important to remain vigilant as economic trends unfold this year. An outside force can cause a sudden shift in sentiment, which is why we monitor surveys like the one conducted by The Wall Street Journal.

Keep us in mind as you read information about the economy. We’d welcome the opportunity to hear your thoughts.

Changes To Paycheck Protection

On Monday, Feb. 22, the White House announced several changes to the Paycheck Protection Program (PPP) that went into effect on Wednesday, Feb. 24. These changes are intended to further target “the smallest businesses and those that have been left behind in previous relief efforts.”1

If you’re a small business owner in need of financial assistance, you may find these changes helpful in securing a PPP loan:

Change #1: Two-Week Exclusive Application Period
Beginning Feb. 24, the PPP will only accept applications from businesses with 20 or fewer employees. According to the White House, approximately 98 percent of small businesses in America have fewer than 20 employees, yet these small businesses have found it difficult to compete with larger companies for PPP loan access. There will be a 14-day exclusive application period, which is designed to help lenders focus solely on serving these small businesses.1

Change #2: Adjustments to the Loan Calculation Formula
The White House has announced that adjustments will be made to the current loan calculation formula. This will be done to address challenges faced by small businesses without employees. These include sole proprietors, independent contractors, and self-employed individuals. In past instances, these business owners have received as little as $1 in PPP assistance or been excluded from receiving funding altogether. In conjunction with an adjustment to the loan calculation formula, $1 billion will be set aside for businesses without employees located in low- and moderate-income areas.1

Change #3: Reduce Non-Fraud Felony Restrictions
The PPP Second Chance Act will eliminate some restrictions business owners currently face. Businesses will no longer be ineligible if a 20 percent or greater owner was convicted of a non-financial assistance related felony in the last 12 months unless they are incarcerated at the time the PPP loan application is filed. In addition, the SBA will remove the restriction on business owners with delinquent student loan debt. The removal of these restrictions will broaden eligibility for business owners who previously were unable to utilize PPP loan assistance.1

Small business owners in many sectors of the economy have been impacted by the ongoing pandemic. While vaccination rollouts are helping to slow the spread of COVID-19, businesses across the country are continuing to grapple with capacity limitations, shutdown orders, and other economic hurdles. If you’re a small business owner struggling to make ends meet, now may be an opportune time to apply for a PPP loan. If you have any questions regarding this process or your eligibility, please contact our office. We may be able to point you in the direction of additional resources.

1. The Wall Street Journal, February 11, 2021
2. S&P Global Market Intelligence, September 21, 2020

1. WhiteHouse.gov, February 22, 2021