According to a survey from the Association for Corporate Growth, 62% of small and medium-sized businesses majority-owned by venture capital, private equity or other private capital providers are excluded from the Paycheck Protection Program.
The survey was conducted between April 4 and April 6 and included 1,131 professionals involved in U.S. small and medium-sized businesses.
Among responders, 77% reported the PPP exclusion will impact the survival of their business, 92% stated the PPP exclusion will result in employees being laid off and more than 85% anticipate layoffs in the next month, including 61% who expect layoffs 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, five million are at risk due to the current exclusion from the PPP.
“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,” Thomas Bohn, president and CEO of the ACG, said. “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.”