PPP Round 1: Who got the money?
The first round of the Paycheck Protection Program (PPP) began on April 3 and disbursed nearly $350 billion in just two weeks. The program, which is part of the $2 trillion stimulus billis intended to help struggling small businesses that have been hit hard by the coronavirus pandemic and the limitations of in-person interaction that come with it. The PPP is already in full Second roundbut with the first round in the books, let’s look at who the money went to.
Loan amount and approval
Recent data from the Treasury Department shows that lenders issued more than 1.6 million loans with a collective value of more than $342 billion as of April 16 (some data must be missing as $349 billion was lent to the total).
Now the program has received first-round criticism for not prioritizing small businesses, but according to the data, more than 74% of PPP loans issued were for $150,000 or less. When you look at the volume of loans, a higher amount was granted between $350,000 and $1 million and between $2 and $5 million, although this does not necessarily mean that these loans were not going to small businesses. . Loans over $5 million accounted for only 0.27% of the total number of loans.
|Amount of the loan||Loans approved||Dollars approved||PCT. County||PCT. the amount|
|$150,000 and under||1,229,893||$58.3 billion||74.0%||17.0%|
|> $150,000 to $350,000||224,061||$50.9 billion||13.5%||14.9%|
|> $350,000 to $1 million||140 197||$80.6 billion||8.4%||23.6%|
|> $1,000,000 to $2,000,000||41,238||$57.2 billion||2.5%||16.7%|
|>$2 million to $5 million||21,566||$64.3 billion||1.3%||18.8%|
|$5 million||4,412||$30.9 billion||0.3%||9.0%|
Geography and industry
Perhaps not a huge surprise, California, Texas, New York, Florida, Illinois and Pennsylvania received the most PPP money by volume. After all, these six states have the six largest populations in the United States, as well as bustling metropolitan areas with plenty of business activity.
|State||Loans approved||Dollars approved|
|New York||81,075||$20.3 billion|
Not counting the US provinces and islands, Alaska and Wyoming are the only states to have received less than $1 billion in total P3 funding.
In terms of industry, construction has received the most assistance so far with nearly $45 billion in total loan volume. That makes some sense considering the industry has been hit hard by supply and demand disruptions, delayed projects, closed sites, and labor shortages. Some cities like Boston have even ordered a ban on urban construction projects. However, the volume of construction-only PPP loans just outpaced loans to professional, scientific and technical services firms; manufacturing; and health care and social assistance.
|Subsector||Loans approved||Dollars approved||PCT. the amount|
|Professional, scientific and technical services||208 360||$43.3 billion||12.7%|
|Health care and social assistance||183,542||$39.9 billion||11.7%|
|Accommodation and food services||161,786||$30.5 billion||8.9%|
|Retail business||186,429||$29.4 billion||8.6%|
|The wholesale trade||65,078||$19.5 billion||5.7%|
|Other services (except public administration)||155,319||$17.7 billion||5.2%|
|Administrative and support and waste management and remediation services||72,439||$15.3 billion||4.5%|
|Real Estate and Rental and Leasing||79,784||$10.7 billion||3.1%|
After the program ran out of money in the first round, banks and other lenders still had swollen pipelines of loan applications from businesses in need of funding. As a result, Congress allocated an additional $310 billion for the program’s second round. The first round of the PPP received widespread criticism for providing loans to large companies that may not necessarily need them, and for allegedly not repaying loans on a first-come, first-served basis.
So the SBA and the US Treasury Department have been trying to fix some of the issues in the second round, mostly trying to make sure the money gets to the small businesses that need it the most. Some early data from the second round suggests things could be better. In the first $175 billion of the second round, the average loan size is $79,000, compared to $206,000 in the first round. Many also suspect that due to the large pipelines the lenders had in the second round, the full $310 billion is likely already exhausted. Recently, the director of the National Economic Council, Larry Kudlow noted on CNN that a third PPP round might be needed, although he did not give an actual commitment or timeline for the potential funding.