Update: New Data on 2nd Round of PPPMay 6, 2020
The U.S. Department of the Treasury and Small Business Administration (SBA) released a report outlining the loans approved in the second round of the Paycheck Protection Program (PPP).
The president signed the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266) into law on April 24, which provided an additional $484 billion in coronavirus relief funding, replenishing the PPP for small businesses and the hospitality industry, providing more money for hospitals, and allocating funds for COVID-19 testing. Specifically, it added an unrestricted $250 billion to the PPP and sets aside another $60 billion for smaller financial institutions such as credit unions and community banks – $30 billion for those with assets less than $10 billion, and another $30 billion for those with assets between $10 billion and $50 billion. It also allocated $60 billion to the Economic Injury Disaster Loan (EIDL) program (another small business program separate from the PPP), $10 billion of which is in the form of advance grants that do not have to be repaid. The EIDL program received $10 billion in funding in the CARES Act, but that was also quickly depleted and closed to new applications.
The new report includes numbers on approved loans in states and territories, loan size, and top lenders. Since Round 2 of PPP loan processing began on April 27, 2020, approximately 2.2 million loans have been made to small businesses which surpasses the number of PPP loans made in the first round of PPP.
The total value of these approximately 2.2 million loans is more than $175 billion and the average loan size in the second round was $79,000, yet another indicator that the program is broadly based and assisting the smallest of small businesses.
Nearly 500,000 of the second round PPP loans were made by lenders with less than $1 billion in assets and non-bank lenders. Such lenders include Community Development Financial Institutions, Certified Development Companies, Microlenders, Farm Credit lending institutions, and FinTechs. More than over 850,000 loans — about one third of the approximately 2.2 million loans — were made by lenders with $10 billion of assets or less.
Since the launch of PPP on April 3, SBA has processed over 3.8 million loans for more than half a trillion dollars of economic support in less than one month. The loans are intended to be used largely for payroll, along with rent, utilities, and certain other expenses, but are generally forgivable if the business maintains its staff and payroll numbers through June 30.