The last few days have been a rollercoaster ride of good and bad news coming from Federal, state, and local levels. Top of mind for most businesses is the announcement on April 15th that the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) both ran out of funding and won’t be accepting any new applications until more funds are allocated by Congress.
Additionally, news that Holland America and Princess were both canceling their Alaskan cruises and not opening their properties for the summer was a huge blow to the tourism industry. That plus oil prices continuing to trend around $20 a barrel seem to indicate that the state is in for a rough year ahead. The unemployment numbers reflect that with roughly 50,000 Alaskans becoming unemployed in the last few weeks as a result of the continuing economic crisis.
It’s not all bad news though. The PPP ran out of money due to the unprecedented demand and rapid release of over $345 billion in funds to businesses across the nation. In under two weeks, the SBA processed over 1 million PPP applications. According to the SBA, as of April 13th when only $247 billion of the PPP funds had been disbursed, 2,703 Alaskan businesses had been approved for over $600 million in funding.
With 75% of those funds likely going towards payroll, a lot of those recently unemployed Alaskans could be headed back to work in the next two months. We’re hopeful that that will be supplemented with EIDL funds that should start getting deployed over the next two weeks.
I strongly believe that Congress will pass additional relief funding soon and that additional CARES Act funding will also be deployed in Alaska even sooner. That, added to the various statewide and local efforts to keep our businesses going will hopefully ensure that as many businesses as possible are able to make it through this global catastrophe.
Alaska SBDC Executive Director