Latest media experiences have painted a false narrative about actual property professionals who took out SBA Paycheck Safety Program (PPP) loans throughout the peak of the COVID-19 pandemic. Sadly, the articles selected to deal with outliers and didn’t inform the story of the typical REALTOR®.
Congress and the Small Enterprise Administration meant PPP loans to perform as bridge loans, holding companies open, staff on payroll, and payments paid at a time when many companies have been compelled to pause their actions and confronted uncertainty as to once they may reopen and whether or not prospects would return. The true property business was no completely different. Early within the pandemic, open homes stopped and plenty of of their shoppers, going through uncertainty about their monetary future, selected to attend to buy or promote a house. PPP loans offered a short lived supply of revenue for these actual property professionals, together with impartial contractors and the self-employed.
Mortgage quantities have been based mostly on wage expenditures (with particular person salaries capped at $100,000) and the variety of staff, and there have been strict laws on what they might be used for: wage prices of staff, hire or mortgage curiosity for the enterprise, utilities, and different enterprise bills. PPP loans allowed many actual property brokers to maintain their employees on payroll, preserve their enterprise location, and canopy their very own revenue throughout an extremely fraught time. Because of this, these actual property professionals have been capable of return to work when native laws allowed and help their shoppers with their property wants.
NAR labored carefully with Congress and the SBA to make sure that PPP loans have been accessible for small companies, impartial contractors, and the self-employed, and that the forgiveness course of was streamlined and simple to know. The SBA set the forgiveness necessities, and if an actual property skilled acquired a PPP mortgage and certified for forgiveness, there was no unhealthy religion at play. These loans functioned the way in which that the SBA and Congress meant – holding companies open so they might return to work and proceed to assist drive the economic system ahead.
In 2020, 80% of actual property companies had a single workplace, sometimes using three full –time actual property licensees; 86% p.c of companies have been impartial, non-franchised corporations. The median wage of a REALTOR® was $43,300 in 2020. For a lot of of those members, even when they went on to attain success later, early 2020 offered a possible finish of their profession in actual property when confronted with the prospect of a number of months with none revenue. PPP loans helped a lot of them to remain in enterprise, to maintain their staff paid, and finally to return to work when the state of affairs allowed. Actual property is a serious financial driver and has been vital to the nation’s financial restoration, and with out PPP, the nation may need misplaced a lot of those that work diligently to take part in it.