Small Business Loans Flowed to Health Care, Construction and Big States

Small Business Loans Flowed to Health Care, Construction and Big States

The administration said that the money allocated through the program so far had helped support more than 50 million jobs. The share of overall small business payroll supported per state ranged from 72 percent in Virginia to 96 percent in Florida, according to the Treasury release.

The Paycheck Protection Program offers businesses with 500 or fewer employees loans that can be forgiven if the employer meets certain conditions, like using the bulk of funds to pay employees. An initial round of program funding was rapidly exhausted, but a second round saw slower demand, leaving the program with about $131.9 billion in its coffers. President Trump on Saturday signed legislation that extends the application deadline, originally June 30, to Aug. 8.

Looking at the aggregate data by geography, there was no apparent link between the amount of economic damage individual states have suffered amid the pandemic and how successful small businesses in a particular state were at accessing the loans from the program.

Four states in the Great Plains — North Dakota and South Dakota, Nebraska and Kansas — all saw loan approvals of at least 90 percent of their eligible small business payroll, even though they rank among the least-affected states in terms of unemployment claims during the crisis. Two of the hardest-hit states for claims, New York and California, saw loan approvals equal to about three-quarters of their eligible payrolls; by that measure, California companies would have received billions more from the program if they had seen approvals at the same rate as the Plains states.

Treasury Secretary Steven Mnuchin and Jovita Carranza, the head of the Small Business Administration, had previously said that they would release the names of borrowers who had received at least $150,000 through the program before the July 4 holiday weekend. A senior administration official said cleaning the data for public consumption took longer than anticipated, though it was provided to Congress on Friday.

The detailed disclosures coming later on Monday are the culmination of a monthslong fight over transparency. After initially refusing to disclose detailed information about borrowers, the Trump administration reversed course in mid-June, saying it would provide more data amid pressure from lawmakers and watchdog groups.

The push for detailed disclosure came after large companies tapped the program funds, which were initially in short supply. In the first few weeks after the program opened in April, public companies disclosed in financial filings that they had been among the beneficiaries. The revelation that big name-brand organizations like Shake Shack and the Los Angeles Lakers were getting bailout money prompted Mr. Mnuchin to push businesses that did not need the loans to return them.

Source link