- The Small Business Administration (SBA) approved 60,000 loans submitted by 3,000 lenders in the seven days after the paycheck protection program (PPP) resumed on Jan. 11, the agency said. in a report.
- The more than $ 5 billion in new loans is part of the $ 284 billion earmarked for PPP in a coronavirus aid bill signed on December 27, and comes on top of $ 525 billion in forgivable loans to small businesses during the first PPP loan period from April to August. from last year.
- The SBA, as of Jan. 12, has released over $ 1.1 million in PPP loans totaling over $ 100 billion while simplifying loan forgiveness applications to one page for borrowers who have received $ 150,000 or more. less.
Businesses shut down as the coronavirus spread early last year, and in April unemployment soared to 14.7%, the highest rate since such a record began in 1948, according to US Bureau of Labor Statistics.
PPP loans in 2020 cushioned the blow from COVID-19, helping 5.2 million small businesses maintain jobs for 51 million American workers, according to the SBA. Yet unemployment in December remained high at 6.7%.
Less than $ 1.9 trillion coronavirus relief package proposed by President Biden, the government would provide more than $ 15 billion in grants to over a million small businesses. The so-called US bailout would also leverage $ 35 billion in government funds into $ 175 billion in loans and investments for small businesses.
At the start of its current PPP program, the SBA provided a brief period of early access to first draw requests from lenders to underserved and minority small businesses, community development financial institutions, minority depository institutions, credit card companies, development and microcredit intermediaries. The SBA did not indicate the total amount of loans it approved for these institutions.
Restaurants and hotels, especially those hard hit by the pandemic, also eligible for loans up to 3.5 times their monthly wage costs in this latest PPP cycle compared to 2.5 times their wage costs in last year’s PPP cycle. Maximum loans are capped at $ 2 million and businesses are limited to 300 employees or less.
It is not known how the SBA determines which small businesses are more needy than others, however, especially when comparing Moms and Dads to franchisees with large chain affiliations. The owner of Ghandi Mahal, a Bangladeshi and Indian restaurant in Minneapolis, Minnesota told CBS News for example, he was refused a six-figure loan in the first round.
During the first round of PPP loans, the SBA identified more than 75,000 franchise businesses that received loans, including 4,278 Subways, 2,455 Dunkin ‘and 2,217 McDonald’s operators, according to the Washington Post. All franchise businesses received 3% or $ 15.6 billion of the $ 522 billion loaned on April 3 and August 8.
In 2020, 27% of total PPP loans went to low and moderate income communities, according to the SBA. More than $ 133 billion in program loans have been made to small businesses in historically underutilized activity zones (HUBZones), while small businesses in rural areas received $ 80 billion.