With COVID-19 still prevalent in many regions, no final conclusions on small businesses or the economy can be made quite yet, but data points that have been gathered and analyzed so far over the last 6+ months give us some very interesting insights into how small businesses with PEO partnerships fared versus non-PEO small businesses.
Specifically this report took a comparative look at the data and answered questions like:
- How likely were PEO clients vs. Non-PEO clients to receive a PPP loan?
- How likely were they to receive a PPP loan in round one?
- What was the likelihood of temporary closure for each group?
- What was the likelihood of permanent closure for each group?
- What was the PPP loan application success rate specifically for PEO clients?
What is a PEO?
Professional Employer Organizations (PEOs) provide comprehensive HR solutions for small businesses. Typically these HR solutions include things like:
- Payroll processing and tax filing services
- HR administration
- Employee benefits services
- Tax administration
- Risk & compliance assistance
These are the core fundamental administrative areas that every small business needs to manage in order to function properly and minimize risk. Unfortunately, many small businesses don’t have the in-house budget or expertise required for a dedicated HR administrative team.
When you partner with a PEO, you get the benefit of their industry expertise, economies of scale, shared liability and risk, and a dedicated team of administration experts to manage your HR, payroll, and employee benefits for you. This frees up your time and resources so you can focus on growing a successful business while your PEO partner handles all the administrative workload and complexities for you.
Just remember, not all PEOs are created equal. There are PEOs in the market that are not IRS-Certified, which is an essential certification in order to provide you with the most accurate, compliant services. IRS-Certified PEOs have gone through a voluntary program that involves thorough background and experience prerequisites, strict financial requirements, independent audit standards, and required client contractual conditions that shift potential tax related exposures from your small business to the Certified PEO (CPEO).
Now that you have a general idea what a PEO is, let’s take a closer look at the findings of NAPEO and independent analytics and research firm, McBassi & Company.
PPP loan program – the cornerstone of small business survival
COVID-19, along with the subsequent government-mandated shut downs, created unprecedented economic challenges unlike anything we’ve ever really seen before. Small businesses, unfortunately, were hit particularly hard.
One of the biggest plans created to support at-risk businesses during COVID-19 has been the Paycheck Protection Program (PPP), introduced by the federal Small Business Administration.
The PPP loan program was created by the CARES Act in March 2020, designed to provide forgivable loans to businesses so they could continue to pay their employees and other critical operating expenses to help them weather the storm of the adverse effects of COVID-19.
This was a highly-necessary program that had to be rolled out very quickly, and as a result of its rapid launch there were many challenges. Everything from eligibility criteria, lack of clarity around how the funds must be used in order to qualify for loan forgiveness, and a convoluted application process just to name a few. Frankly, many small business owners felt like they needed a lawyer just to understand and navigate the myriad of complexities around the PPP loan program.
Hoteliers from independent bed-and-breakfast concepts, global hotel chains, and everything in-between have faced immense challenges throughout the pandemic.
Suppliers in the hospitality industry have been adversely impacted by the pandemic, with reports of revenues of less than 10% of 2019 levels during the first lockdown.
Who is ready to say goodbye to 2020? I think the answer to that question is one that we can all agree on. But before we take off for the holidays and get ready to put it all behind us, there are some end-of-year tasks that Payroll and HR teams need to take care of to get ready for the new year.
Learn more about our New HotSchedules Health Survey feature.
Get a demo, learn more, or just ask some questions. We’re here to help! Complete the form to the right and a product specialist will be in touch!