(Bloomberg) -- The Trump administration released new details on the biggest coronavirus-relief initiative Friday night that show more than 98% of loans approved after July 6 were for less than $150,000 -- suggesting the program was reaching smaller businesses before it closed earlier this month.
The Paycheck Protection Program had been criticized for not being quick enough in serving independent contractors, truly small firms and minority-owned companies. The new data show that most loan approvals in July and August were for personal-services firms, general freight and trucking companies and beauty salons.
The data released Friday by the Small Business Administration and Treasury Department add details on almost 379,000 new loans approved between July 6 and the program’s close on Aug. 8 and can be found here. Last month, the agencies had released an initial dataset for almost 4.9 million loans approved from April 3 through June 30; the earlier data were riddled with errors that the SBA appears to have addressed in the new release.
An SBA spokesman did not respond to a messages seeking comment.
The data release comes as negotiations have stalled among Democratic lawmakers and the Trump administration on a stimulus package that could include another round of PPP with the opportunity for small firms hardest hit by the pandemic to get a second loan.
While it’s good that more loans went to smaller firms and that the SBA has corrected some errors, there’s still a need for more PPP funding and modifications to the program -- including simplifying the process for firms to have loans become grants, said John Arensmeyer, who heads the Small Business Majority, an advocacy group that chiefly represents firms with fewer than 100 employees.
“Without these changes PPP will be unnecessarily hamstrung,” Arensmeyer said.
The program, which was the centerpiece of the $2.2 trillion coronavirus relief package enacted in March, allowed small businesses to apply through lenders for a loan of as much as $10 million. Loans can be forgiven if at least 60% of the proceeds are spent on payroll and the firm maintains salaries and headcount. In all, the program has approved more than 5.2 million loans worth $525 billion.
The previous data contained inaccurate numbers of jobs retained -- sometimes citing “0” or “1” for multimillion-dollar loans. In a statement accompanying Friday night’s release, the agency said it was amending its label for such data from “jobs retained” to “jobs reported” -- to recognize that the number comes from what was reported on borrowers’ applications.
Changing the name may not do much to improve the data’s reliability; administration officials have credited the PPP with supporting 51 million jobs, but that number has been impossible to verify because of the gaps in the program’s loan-level data. The SBA said it made no changes to the job numbers provided by lenders in the data released Friday.
Other errors have turned up in the agency’s data as well, including incorrect loan amounts, loans located in the wrong congressional district and duplicate loans. The SBA had said its data are based on what lenders submitted, and the agency encouraged both lenders and borrowers to report any errors.
In Friday’s data release, it appears that the SBA addressed the most glaring errors related to loans reported for the wrong congressional districts, including 226,000 in Pennsylvania and North Carolina. Also, some venture capital firms that complained they were included as loan recipients in the previous data release even though they got no funding no longer appear in the data.
And the names of several small firms whose owners said they were listed for large loans when they actually received much smaller amounts also no longer appear in the data -- suggesting their loan amounts were corrected and are now less than $150,000, the threshold at which the SBA withholds borrowers’ names from disclosure.
The agency said in a release Friday night that the new data were updated to remove loans that were canceled for any reason, and the congressional districts for borrowers were updated. An analysis of the new dataset indicates that more than 52,000 loans have been canceled since the program began.
The SBA had said cancellations could be for a number of reasons, including duplicates and loans that were returned, but the agency hasn’t provided details. About $38.5 billion in loans were canceled as of the end of May, according to a Government Accountability Office report, including by firms that rushed to return loans after a public outcry about larger, publicly-traded companies that took funds.
‘Numbers Are Unacceptable’
Last month’s disclosure of transaction-level data for about $521.5 billion of the program’s lending at the time sparked criticism over some entities that were approved for relief, including firms with ties to President Donald Trump, religious organizations, investment firms and some U.S. units of Chinese companies.
Besides the smallest firms that complained about getting shut out of the program, disadvantaged companies said they were excluded -- at least initially. Minority-owned firms in particular have been disproportionately affected by the pandemic. The PPP delivered an outsize number of loans to predominantly White parts of the country in its first two weeks of operation, leaving firms in mostly Hispanic and Black areas to wait until a second tranche of funds became available, a Bloomberg News analysis showed.
During the past two months, SBA officials pushed to get such firms to apply, including by setting aside $10 billion for community development financial institutions -- which typically deal with smaller firms -- to lend.
In the first batch of data though June 30, smaller loans of less than $150,000 accounted for almost 87% of the total number of loans. For the almost 379,000 loans approved between July 6 and Aug. 8, only about 7,380 -- or fewer than 2% -- were for more than $150,000.
The average PPP loan amount dropped to $100,729 for those approved through Aug. 8, down from $106,744 as of June 30. Among loans of $150,000 or less, the median amount declined to $13,465 from $20,661 during that time, data show.
A tiny slice of the new loans -- less than 0.2% -- were for $1 million or more. The largest portion of these comparatively big-dollar loans were approved for the nursing home industry, which received at least $82 million in the new round, and the home-health industry, which received at least $54 million. The third-largest share went to “elementary and secondary schools,” which received at least $33 million, data show.
The SBA has said any discrepancies and the actual number of jobs retained will be reconciled when borrowers apply with lenders to have their loans forgiven. The agency also reserves the right to review any loan and has promised to scrutinize those of more than $2 million.
The Trump administration did not release complete data for every loan. For those of more than $150,000, the names of companies were provided, but loan amounts were expressed only in broad ranges. For loans below $150,000, the data include specific amounts and other details but no personally identifiable borrower information.
As of Aug. 8, the last day for new applications, the PPP had almost $134 billion in remaining funding, which will be returned to the Treasury unless Congress votes to re-purpose it.
(Updates with additional details from third paragraph)
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