Treasury names more than 650,000 small businesses receiving government loans
WASHINGTON (AP) – The Treasury Department on Monday released the names of more than 650,000 businesses that have received funds from the government’s small business loan program, a massive effort to support the economy as states shut down in April to contain the viral epidemic.
Treasury identified just a fraction of total borrowers, citing only companies that earned more than $ 150,000. These businesses represented less than 15% of the nearly 5 million small businesses that received loans.
The average loan amount for the entire program was $ 107,000, the Treasury Department said in a general summary from the program. The government distributed $ 521 billion under the Paycheque Protection Program, a critical part of the government’s $ 2 trillion bailout. Loans can be canceled if the companies primarily use the money to continue paying their workers.
The beneficiaries employed 51 million people before the start of the pandemic, said Treasury Secretary Steven Mnuchin, or about 85% of all workers in companies with fewer than 500 employees. Not all of these jobs were saved. The government will not know how many there were until companies ask for loan cancellation, a process that is only just beginning.
While the data included demographic information on some borrowers, officials said it was incomplete because companies were not required to provide information on their race, ethnicity and gender. More of this data may become available when borrowers request loan cancellations.
But the government was able to determine that 27% of the loan money went to low and moderate income areas, officials said.
The PPP was operational just days after being approved by Congress at the end of March. It has provided loans of up to $ 10 million to small businesses to help them recover from government-ordered shutdowns and lost revenue caused by the virus outbreak. The ability to convert loans into grants made the program particularly attractive.
Once opened on April 3, the P3 sparked a flood of applications from desperate small business owners. The SBA approved more than 1.6 million loans worth $ 349 million in less than two weeks, depleting the initial funding. Millions of other companies had to wait almost two more weeks for Congress to approve an additional $ 310 million. Nearly 3.2 million loans worth $ 172 billion were approved in the second round as of June 30, leaving an estimated $ 132 billion unclaimed. Congress approved an extension of the program this week until August 8.
Economists generally attribute to the program helping to prevent the labor market collapse from being much worse. Employers created 7.5 million jobs in May and June, a solid increase even as it left the economy with nearly 15 million fewer jobs than before the pandemic. Many economists attribute part of this gain to PPP.
Yet other analyzes, such as that conducted by economists at Standard & Poors, found that firms in states with fewer job losses received more loans than those in hardest-hit states.