Millions of Lower Middle Market Jobs at Risk in Today's Paycheck Protection Program Vote
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urvey results published by the Association for Corporate Growth (ACG), a worldwide network of 90,000 middle market professionals, show a devastating impact if Congress votes to again exclude lower middle market companies, majority-owned by venture capital, private equity, or other private capital providers, from the 7(a) loan program created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In less than 48 hours (April 4-6), ACG surveyed more than 1,131 professionals involved in U.S. small and medium-sized businesses, to determine which companies were excluded from the Paycheck Protection Program because the U.S. Small Business Administration's adherence to longstanding affiliation rules. The survey shows the devastating effects of this decision
62% of respondents are currently excluded from the Paycheck Protection Program (PPP)
77% reported the PPP exclusion will impact the survival of their business
92% stated the PPP exclusion will result in employees being laid off
More than 85% anticipate layoffs in the next month - of which 61% expect that to occur in the next two weeks
The affected companies and respective layoffs are nationwide, with California, Texas, Florida and New York topping the ACG estimates that of the 45 million people employed in the middle market, 5 million are at risk due to the current exclusion from the PPP.
ACG urges Congress, U.S. Secretary of the Treasury Stephen Mnuchin and Small Business Administration Administrator Jovita Carranza to act quickly to allow lower middle market businesses majority-owned by venture capital, private equity, or other private capital providers to access relief funds through the PPP. These small and medium-sized businesses, many with far fewer than 500 employees, would otherwise qualify, if not for private-backing.
Thomas Bohn, President and CEO of ACG, stated, Right now we are in the thick of one of the worst health and economic crises any of us will experience in our lifetimes. And while Americans have banded together to fight the incredible devastation caused by COVID-19, Congress has continued to exclude tens of thousands of small and medium-sized businesses, currently employing millions of Americans, from loans through the Paycheck Protection Program.
He continued, Our survey illustrates a foreseeable future that we can prevent. We implore Congress, to honor the needs of all hard working Americans by allowing lower middle market businesses, regardless of capital structure, to be eligible for these loans. Doing so will keep businesses open, save jobs and ensure millions of Americans keep their healthcare coverage during this global pandemic. Let's work together to minimize the damage and maximize the path to recovery.
ACG's professional members drive growth at more than 200,000 middle market companies, or one third of private sector GDP, that employ over 45 million people. Middle market companies drove America's recovery from the 2008 Global Financial Crisis and can do so again if Congress fulfills its intent to protect them and the Americans they employ. In fact, the middle market was the single largest contributor to growing U.S. jobs, accounting for over 51.8 million jobs created since the financial crisis (2011-2017).
To support expansion of the PPP and the survival of U.S. small and medium-sized businesses, ACG encourages currently ineligible companies to contact their members of Congress.
✔️ Millions of Lower Middle Market Jobs at Risk in Today's Paycheck Protection Program Vote
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