Advisors around the country are helping small-business clients apply for federal stimulus loans to stay afloat as a result of the economic fallout from the coronavirus. But not many are applying for loans for their own firms – yet.
That was the assessment Friday of Geoffrey Brown, CEO of the National Association of Personal Financial Advisors (Napfa), which has 3,800 members, virtually all of whom own or work for small businesses as defined by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The law, passed last month by Congress and signed by President Trump, is a wide-ranging $2 trillion economic stimulus package that includes aid to small businesses, defined as those with 500 or fewer employees.
Brown said Napfa hasn't done a formal survey of its members. However, it has heard from many of them who say they are working longer hours because of the crisis, in part because they are doing more administrative work with employees tending to their own families and because clients need more advice. He added Napfa members who have small-business clients are primarily helping them apply for loans from the Paycheck Protection Program (PPP) that was established under the CARES Act.
Eventually, some advisors themselves may need to apply. “I think if this goes on much longer they may take a look at it,” Brown said, adding Napfa will be there to help its advisor members make informed decisions.
Kimberly Foss, president of Empyrion Wealth Management in Roseville, CA, says she's encouraging business owners to apply for PPP loans, even if they think they don't need them. “You should apply anyway because you can always turn down the loan," Foss said. “But there’s only $350 billion and it will go fast. My recommendation is to fill out the applications and get them filed as soon as possible to get in queue.”
A recent survey by WalletHub found 35% of small-business owners said their companies can survive for less than three months under the conditions brought on by the coronavirus crisis.
