How Much Do Paycheck Protection Program Loans Help Small Businesses?

This content leverages data from USAFacts, a non-profit that visualizes governmental data. You can learn more on its website, Facebook, and Twitter.

What’s the story?

• The Paycheck Protection Program (PPP), which has provided forgivable loans to over 5 million small businesses worth over $520 billion since it was enacted as part of the CARES Act to brunt the economic toll of coronavirus pandemic-induced lockdowns, is facing an uncertain future with the expiration of its lending authority looming on August 8th.
• With the expiration approaching this weekend and roughly $140 billion in PPP lending authority unused, that funding may be partially or fully repurposed as part of ongoing negotiations about coronavirus relief legislation. With lawmakers considering the future of PPP, here’s a look at which kinds of small businesses received PPP loans and how long those loans would last businesses.
• According to data released in July by the Small Business Administration (SBA), full-service restaurants as a group received the most PPP loans, totalling about 170,500; while lawyers, real estate agents, physicians, and dentists all had over 100,000 loans. 
• The sectors in which small businesses receiving PPP loans operated were relatively diverse. The healthcare sector’s small businesses received $67.3 billion in PPP funding as of July, the most of any sector, followed by professional services at $66.43 billion, and construction at $64.7 billion. This USAFacts chart shows the amount of PPP loans provided the different sectors and how prominent a role small businesses play within that sector:

• PPP loans were designed to cover eight weeks of payroll expenses for borrowing small businesses, so loan amounts varied based on the size of the business. This USAFacts chart shows the amount of PPP funding broken down by sector with the proportion of loans under $150,000 & loans over $150,000:

• Based on SBA loan data, it appears that the PPP largely achieved the program’s stated goal of covering small businesses’ payroll for eight weeks. Small businesses that received PPP loans worth less than $150,000 had an average eight week payroll per employee of $8,090 ― of which $7,421 was covered by PPP loans. This USAFacts chart compares the PPP support received by small businesses compared to their ordinary payroll across various professions & sectors:

What’s the status of the PPP?

• The Paycheck Protection Program (PPP) was enacted as a major component of the CARES Act and aims to help small businesses weather the coronavirus (COVID-19) pandemic with fewer than 500 employees by providing forgivable loans worth up to two months of payroll. PPP loans can be forgiven if small businesses use most of the funding on payroll to rehire & retain workers or on covered overhead expenses.
• The program was initially funded with $349 billion under the CARES Act in late March, and after the initial funding was tapped out within a month, Congress moved to provide an additional $321 billion in funding to keep the program operating and give borrowers more flexibility.
• By the of July, there were more than 5 million PPP loans originated worth a total of $521.4 billion, and the Small Business Administration reported having nearly $140 billion in lending authority remaining. That surplus funding coupled with the upcoming expiration of lending authority for the PPP on August 8th raises the possibility that the PPP funding may be repurposed in full or in part during negotiations over the next phase of coronavirus relief legislation.

— Eric Revell

(Photo Credit: iStock.com / andresr)