Sixty-six percent of business owners reported they were hiring or at least trying to hire new employees in August - 5% more than in July.
The latest data compiled by payroll services company Paychex and information provider IHS Markit shows that national job growth maintained an upward trajectory throughout the month of August. According to the Paychex/IHS Markit employment watch, the economic recovery is continuing despite the Delta variant weighing on small businesses. Despite concerns about inflation, worker shortages, and the growing number of hospitalizations due to COVID-19, hourly earnings growth increased to 3.42% in August. Meanwhile, the Small Business Jobs Index gained 0.45% last month. It’s now 99.80, increasing 5.74% over the past 12 months. This is a record-high year-over-year growth rate and the highest index level since January 2018. The fastest-growing sector was leisure and hospitality, with more than double the growth of any other industry. According to Frank Fiorille, Paychex’s Vice President of risk management, compliance, and data analytics, this sector is driving the recovery. “Wages are starting to go up, especially in the leisure and hospitality segment. We track new hires at these establishments, and the wages are really rising pretty fast as well as signup bonuses, competition to get people to come to work,” Fiorille said. Once the unemployment insurance benefits end on September 6, more workers are expected to flock to job posting sites. Other aid programs are also expiring, such as eviction moratoriums. This is likely to further boost employment figures but will also have a significant impact on the economy at large. All regions of the country recorded employment gains in August, but the south remains a leader in small business job growth, with Arizona topping the list. Washington had the strongest growth rate, climbing to 12th place among states after being ranked last between June 2020 and July 2021. Meanwhile, Tampa, Dallas, Atlanta, Phoenix, and Houston are leading the charge in employment growth among metropolitan areas. “The West had a really strong month and quarter as well, so the West is starting to come back pretty strongly as well,” Fiorille said. “You’re still seeing new business formation is very strong, so that’s another nice indicator that we’re looking at.”
The Paycheck Protection Program, a disaster relief program aimed at helping small businesses recover from the adverse effects of the COVID-19 pandemic, ended May 31, after it had provided over $798 billion in economic relief to more than 8.5 million small businesses and nonprofits, said US Small Business Administrator Isabella Casillas Guzman in a statement issued last week. She pointed out that this program helped small businesses across the US overcome the “once-in-generation economic crisis” and that she is proud of the changes in the system which provided underserved businesses access to this program in the later rounds. “In 2021, 96% of PPP loans went to small businesses with fewer than 20 employees,” added Guzman. The PPP is only one of the eight relief programs established to assist nonprofits and small businesses throughout the pandemic. The other seven programs include the SBA Debt Relief program, Economic Injury Disaster Loan, its three advances, Shuttered Venue Operators Grant, and Restaurant Revitalization Fund. The PPP played a significant role in economic recovery. It was among the first debt relief programs to provide much-needed help to small businesses affected by the pandemic to keep workers on the payroll and their operations running. The overall implementation was very effective, especially in later rounds, when the program opened its doors for the underserved. While some small-business owners looked for banks that could cater to small businesses, others got lucky with the changes to the PPP funds introduced in 2021. Thirty-two percent of the loans from the PPP went to Low-and-Moderate Income, and PPP loans averaged $42,000 in 2021, which clearly shows that the relief went to the smallest of small businesses. Community financial institutions stepped in in this case, providing more than $30 billion through 1.5 million loans.
The US job growth rate remained largely unchanged in May, based on payroll data provided by approximately 350,000 Paychex clients. The Paychex | IHS Markit Small Business Employment Watch May report reveals that the Small Business Jobs Index has experienced a slight decrease, slowing 0.07% month-on-month. Additionally, as a result of part-time and hourly workers with lower wages reentering the workforce, weekly earnings growth fell below 3%. “Small businesses are struggling to return to normal operations and expand due to labor shortages,” said IHS Markit’s chief regional economist, James Diffley, and added that the Small Business Jobs Index held steady in May. Hiring challenges are still present nationwide. Job growth decline in the construction industry has significantly affected the positive momentum seen over the last few months, according to Martin Mucci, Paychex’s CEO and president. Mucci also added that the low availability and high cost of building materials dragged the construction job growth down by 1.78% in May. On the other hand, with more people dining out and going on vacations across the United States, both job growth and wages in the industries of leisure and hospitality have rebounded significantly. These sectors have gained 1.94% in May and 12.4% during the past quarter. The May report also reveals that the national index has gone up 4.58% over Q1 2021, driven mainly by the lower employment comparison level the economy saw last year. Overall, the national index has managed to bounce back to prepandemic levels, even though early 2020 data indicated small business job growth had slightly declined since 2017. With Texas claiming the top ranking among states for job growth rates, the South of the country has remained a clear leader of all regions in small business job growth. Meanwhile, the West was the only region with positive gains in May and has improved for the third month in a row. Additionally, for the first time since 2019, the West has overtaken the Midwest and become the runner-up among US regions.
NASA continues its tradition of supporting US entrepreneurs in developing tech innovations ready for commercial use. NASA’s Small Business Innovation Research (SBIR) program continues that pursuit with its latest set of 140 Phase II rewards for 127 small businesses. A total of $105 million in funding will be awarded to businesses located in 34 different US states and Washington, DC. The program aims to find the most practical technologies for the National Space Agency and the commercial marketplace while including diverse entrepreneurs. Among the companies listed in Phase II funding, there are 33 businesses owned by women, minorities, and veterans. For example, the Salt Lake City-based company, InnoSys Inc., is a woman-owned small business developing a solution for operating cameras in harsh, extremely high-temperature environments. The innovation from InnoSys has both space mission applications and provides a means of imaging fires, inspecting nuclear reactor cores, or furnaces operating at high temperatures. With NASA’s assistance, InnoSys can focus on commercializing its product. If Phase II proves successful, the agency can provide further funding to find potential customers besides NASA. “The Phase II contract period is an exciting time, as small businesses put their ideas into practice and develop prototypes attractive to NASA and private investors. The selected technologies have displayed great potential impacts for their respective sectors, and we are proud to continually invest in today’s booming aerospace economy through these small businesses,” Jason L. Kessler, a NASA SBIR Program executive, stated. Some of the other exciting projects include a compact heat exchanger for possible electrified aircraft propulsion, an AI-powered virtual medical expert, and many others. Working on innovative tech is a demanding process, and our team recommends small businesses use cloud storage services to better coordinate product research and development. After all, a promising small business needs every advantage to secure funding from organizations such as NASA.
Less than 3% of approximately 30 million small-business owners in the US could be impacted by President Joe Biden’s tax increase under the jobs and infrastructure plan.The tax rate increase from 21% to 28% will not affect small businesses organized as “passthrough” enterprises. Limited liability companies are the biggest representatives of passthrough entities, and also account for nearly all small businesses. Therefore, most of them will avoid this hike.What’s more, most small-business owners are single earners. Out of that group, the only ones who will feel the proposed increase are people and married couples with more than $452,700 and $509,300 in annual income, respectively.This potential result is in line with the goal of the new corporate tax rate. After all, President Biden is counting on the support of small-business owners in this matter, as the actual target of this plan is large corporations. The White House seeks to increase the corporate tax rate by 7% to 28%, which would be significant primarily for large corporations like Amazon and Walmart. National trade groups, like the Business Roundtable and the US Chamber of Commerce, are vehemently opposed to the proposed change.According to a White House official, the tax plan should help eliminate the practice of offshoring profits and jobs while paying lower taxes than small businesses, present at many multinational corporations.Republican lawmakers are opposed to the proposal and remain unmoved by the small-business plight. The official White House stance is one open to compromise. According to the official, President Biden “was in the Senate for almost 40 years and understands how the legislative process works, and there is going to be a little bit of give and take with Congress, so that's the part of the process we are in right now.”Even though tax changes won’t impact most small businesses, these business owners will still need to stay on top of their tax obligations. They can do so by using tax software to automate the preparation process and meet filing deadlines.
Unemployed Americans could lose their unemployment aid come this June, two months earlier than initially planned. The announcement comes as a shock for thousands who lost their jobs during the novel coronavirus pandemic. Jobless Americans were supposed to receive monetary aid until Sept. 4, 2021, through the federal unemployment program, but several US states have decided to cut the program by two months. At the moment, the shortened federal aid program is set in motion in Arkansas, Montana, Mississippi, and South Caroline. “Continuing these programs until the planned expiration date of Sept. 4, 2021, is not necessary and actually interferes with the ability of employers to fill over 40,000 job vacancies in Arkansas,” wrote Arkansas Gov. Asa Hutchinson in a letter. Hutchinson added that the current unemployment benefits stop people from taking on new jobs and that the current unemployment rate is just 0.6% under the pre-pandemic rates. In his words, the government aid to jobless people in Arkansas is causing a labor shortage. While this won’t mean an end to all unemployment benefits, it will certainly cause a drastic drop in many people’s income. Specifically, it would mean that jobless citizens of Arkansas will then receive $248 a week, while the weekly check in Mississippi will be $195. The decision was met with a lot of opposition, with the loudest opponents claiming it’ll set America for a wave of family hardship. It will affect not just people who lost their jobs but also self-employed, freelancers, and gig workers who, according to the gig economy statistics, make up 36% of US workers and were already having a rough time throughout the pandemic. Small business owners in many towns had to close their shops, either for good or temporarily, until the business could pick up, saying that the government unemployment checks helped them through this turbulent period. “We’re looking at a tsunami of debt, evictions, and food insecurity on the horizon, and it’s mostly women and people of color who will bear the brunt of that,” said Rebecca Dixon, executive director of the National Employment Law Project. Dixon believes the decision is shortsighted and potentially dangerous.
The Paycheck Protection Program, aimed at helping small businesses affected by the pandemic, ran out of funding May 4 - four weeks before its scheduled end. It is currently not accepting new applications as the $292 billion allocated for the last round of loans is soon to be depleted.Some money remains for lenders to finish processing pending applications. Around $8 billion is set aside and still available for community financial institutions that lend to businesses run by women, minorities, and other underprivileged communities. For this fund, applications are still ongoing, and it will continue to accept applications until funds run out.This new development came as a surprise to many lenders. They estimated that it would run out before the deadline; still, the exact moment coming so soon was unexpected.“It is our understanding that lenders are now getting a message through the portal that loans cannot be originated,” the National Association of Government Guaranteed Lenders alerted its members. “The PPP general fund is closed to new applications.”The latest government data states that the PPP program disbursed $780 billion in forgivable loans to businesses affected by the COVID-19 pandemic so far. In the early days of the pandemic, the number of active business owners plummeted by 22% over two months, from February to April 2020. Among these, African-American businesses suffered the biggest hit, experiencing a 41% drop.The struggle was apparent in the number of applications for small business loans. Companies that offer loans for those with bad credit were especially popular, as well as alternative financing methods, such as crowdfunding.However, it was precisely the Small Business Administration’s loans that helped many businesses stay afloat in challenging times. This is the reason the program was renewed in December’s relief bill. The new program accepted applications from applicants struggling to find funds elsewhere, such as minority or veteran-owned businesses.The interest in these loans was considerable, so the application deadline was pushed forward to May. Unfortunately, the deadline push was not followed by a significant increase in available funds. It seems that the government is counting on pandemic restrictions easing as the vaccination rate grows and deems additional funding unnecessary for many small businesses.Luckily for the business industries hit the hardest by the pandemic - restaurants and live events - help is still underway, as the government’s recent efforts suggest. The SBA program is offering $28.6 billion in grants to food-oriented businesses, and the application process began on May 1. The first three weeks will be focused on approving applications from enterprises owned by priority groups, and the SBA promises to respond to individuals applying for a grant within 14 days.Patrick Kelley from the SBA’s Capital Access office said in a webinar last week that the amount of money Congress set aside for this purpose is likely not going to be enough when the demands coming from this industry are considered.A similar request came in from another sector - entertainment. This industry - music club operators, theater owners, and others in the live-event business - was also heavily hit by the pandemic. A program named the Shuttered Venue Operators Grant program, started on May 2 and will disburse $16 billion in grants to shuttered venues. Approximately 15,000 people applied since the opening of the fund.
Last Monday, California lawmakers sent their governor a bill proposing up to $6.2 billion in tax breaks on PPP loans for small businesses. This will be the last part of the COVID-19 economic recovery package worth around $9.6 billion.Since the pandemic has started, Congress has approved three relief packages, the first of which was delivered last fall, followed by more aid in December.This latest bill will allow California businesses to circumvent the state taxes on loans from the federal Paycheck Protection Program. According to state officials, the bill should apply to up to 85% of California businesses that have received about $96,700 each: A combined $97 billion in federal loans.Business leaders have supported the tax break, including the California state director of the National Federation of Independent Business, John Kabateck. He also said, “Small-business owners shouldn’t be penalized for taking federal support when businesses were adversely impacted by government shutdowns to deal with this terrible pandemic.”Senator Patricia Bates of Laguna Niguel confirmed that she is also in favor of the aid: “With California supposedly enjoying a budget ‘surplus,’ it makes no sense to penalize small businesses for accepting federal assistance — especially since the feds have made such assistance fully tax-deductible.”The bill’s estimated cost will be between $4.4 billion and $6.8 billion, spread across the next six years. The final cost of the package will depend on the excused loan percentage.California Senate President pro Tempore, Toni G. Atkins, said that these measures are a part of the state’s strategy to help speed up the recovery. “California’s businesses helped get us through the COVID-19 crisis, and now that we are emerging out the other side, we must ensure that they have the financial tools they need to rebound stronger than ever,” Atkins added.
According to a statement published on April 26, Equiem has acquired the property management software of British Land. Equiem is a Melbourne-based company whose tenant-experience platform for commercial real estate is the most used in Australia.The terms of the contract were not disclosed in the statement.British Land is the biggest UK real estate investment trust, and it now has less than a 10% equity stake in Equiem. As for Equiem, the Australian company has acquired Vicinitee, British Land’s digital property management platform, a source familiar with the deal said.Gabrielle McMillan, Equiem's chief executive in New York, said that Vicinitee is a great addition to the company, as it can provide property owners with better real estate operations and improve tenants’ experience."It's a digital interface for your building that becomes a remote control for all the things you need in a post-COVID world," said McMillan.With this contract, Equiem has increased its global reach to 500 real estate markets in Europe, Australia, and America and strengthened its partnership with British Land, the owner and property manager of the main office assets in London.The deal between Equiem and British Land is the result of the latest news and trends in property tech. In the first quarter of 2021 alone, this industry “had about 100 US equity financings totaling some $4.5 billion of investment and more than 40 M&A transactions,” the latest statistics show.Before the acquisition, HqO, another tenant experience platform, raised $60 million to expand its business. Similarly, View the Space (VTS), a real estate software provider, acquired Rise Buildings for $100 million.From the outset, tenant experience apps are used to provide tenants with information about important services, like the closest healthcare services, fitness centers, and restaurants to their property. Due to the COVID-19 pandemic, landlords and real estate professionals have started using these apps to simplify communication with their residents on managerial questions, like buildings maintenance and safety issues. With property management platforms, property owners can manage their rentals easier and faster. They can create leases, save the information of prospective tenants, and collect rental payments.
According to a company press release, Tribe Property Technologies has purchased the rental portfolio of KEY Property Marketing, which consists of approximately 75 service contracts. The closing of this deal marks Tribe’s first acquisition as a public company.“This is a strategic step for us in further expanding Tribe’s ability to deliver services to condominium investors who are looking to rent out their units in the BC market,” said the CEO of Tribe, Joseph Nakhla.Tribe is a property management company that focuses on providing owners, residents, councils/boards, real estate developers, and vendors with services that combine innovative technology and hard-working staff members. These services include condo/strata and rental management, a community platform, as well as developer and landlord tools.KEY Marketing was founded by Cam Good in 2009. It offers real estate design, marketing, and sales services. In 2015, Good acquired KEY Property Management, which specializes in finding quality sites for developers and connecting them with buyers.In regard to the purchase, Good said: "This sale allows me and KEY's Leadership Team to focus on the rapid growth of KEY Marketing while Tribe better services people investing in condos."This latest business venture is just one of several big steps Tribe has taken in recent months. Late last year, the company bought Gateway Property Management, making it the sixth largest condo management company and the sixth largest rental management company in Canada. On April 14, 2021, it began trading on the TSX Venture Exchange. Currently, Tribe’s property management platform is being used by a number of condominium complexes and residential communities throughout Canada."We believe that the independent owner-investors market is a big market that is currently underserved. With three out of every 10 condos being rented to tenants in both Vancouver and the Greater Toronto Area, we are aiming to improve that experience for both investors and tenants with our technology platform and services," Nakhla added.
The Small Business Administration has announced in a press release that restaurants most heavily affected by the pandemic will receive stimulus money from a fund worth $28.6 billion.The funds form part of the $1.9 trillion economic stimulus bill - called the American Rescue Plan - which was passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021. Restaurants that have suffered revenue loss due to the pandemic will be able to apply for up to $10 million per business and no more than $5 million per physical location.SBA administrator Isabela Guyman said the administration is “focused on ensuring that the RRF program’s application process is streamlined and free of burdensome, bureaucratic hurdles – while still maintaining robust oversight.”Various businesses in the food and drink industry are eligible to apply for the Restaurant Revitalization Fund program, including restaurants, food stands/trucks/carts, caterers, bars, saloons, lounges, taverns, bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, distilleries, inns, and licensed facilities that produce alcohol and allow people to taste, sample, or purchase their products.The official timing of the application’s launch is yet to be announced. What is known is that after the program opens, for the first 21 days, the SBA will accept applications from all eligible applicants, but will only process those submitted by women, veterans, and socially and economically disadvantaged business owners. Once the 21 days are up, all applications will be treated equally.The SBA is collaborating with numerous business stakeholders to ensure that the application process goes smoothly and to discuss any potential concerns regarding the relief package.“The USBC believes this initiative and collaboration with the SBA will bring needed resources and relief to these often underserved businesses to aid in stabilization, recovery and ultimately, strengthen our economy.” said Ron Busby, Sr., the President and CEO of U.S. Black Chambers, Inc. (USBC).As some of the best LLC Companies, the SBA is committed to providing individuals with the resources they need to start their own business and run it successfully.