As the Paycheck Protection Program (PPP) continues into August, the question remains as to what the program — with over $521 billion in funding dispensed as of June — has done for American businesses. Loan-level data through June 30, released in July by the Small Business Administration (SBA), might hold the answer.
The loan-level dataset includes detailed industry identification, down to specific professions. Full-service restaurants constituted the largest number of approved loans, accounting for almost 170,500. Lawyers, real estate agents, physicians, and dentists followed, all with over 100,000 loans approved.
PPP broke with traditional SBA policies in making nonprofits eligible for small business loans. Recipients included civic and social organizations ($1.6 billion), religious organizations ($7.3 billion), and other non-profits ($4.6 billion). These loans constituted 2.6% of total dollars as of the end of June.
Healthcare and social assistance, which supports the most small business employees of any sector, received the largest share of loan dollars (12.9%) as of July. That is a shift from the initial round — April 3 to April 16 — when construction received the most. These numbers are among those released in a more recent July SBA overview report.
The detailed data from June reveals more about industries and loan size. Large loans added up, with several industries receiving over $45 billion each in loans of $150,000 or more. Among them were construction; healthcare and social assistance; professional, scientific, and technical services; and manufacturing.
The program is meant to support up to eight weeks of payroll, and all reviews of job retention — to assess whether the government will forgive all or part of the loan — occur at the end of that period. That means that businesses that receive loans valued at less than eight weeks of payroll still need to make it through the entire two months in order to take advantage of loan forgiveness. Did PPP loans fill payroll need for most businesses?
Most loans — of those under $150,000 —seem to have covered the expected amount of time: an average of 8.1 weeks of payroll. That analysis compares average loan value per reported job saved to average industry payroll per employee as reported by the SBA.
Looking at the 25 industries that received the highest number of loans, there was variation in the amount of payroll covered. Loans to financial businesses averaged 2.6 weeks of pre-pandemic payroll, and those to sports and the performing arts averaged 3.2 weeks. Meanwhile, loans to food and drinking places covered 10.6 weeks of payroll. Of course, the average wage differs across industries, with the cost of a finance employee an average of $14,200 more per month than one working in a restaurant or bar. Were financial businesses to retain their employees at restaurant-industry wages, the loans given would support them for an average of 27.8 weeks, or almost seven months.
PPP appears to have approached its goal of supporting many small businesses for around eight weeks of payroll — although it is unclear whether the jobs it saved in the short term will survive a continuation of the pandemic in the coming months.
Get more facts on PPP and access to the data used in this article. Datasets are linked under "What is this data?" in the "Questions to ask" section.
For the "How long will loans last businesses?" section:
The loan-level dataset includes optional reporting about the number of jobs retained using PPP support, allowing a calculation of average dollars loaned per employee. Because of limitations within the dataset, which does not specify the exact dollar amount for loans over $150,000, one can only use smaller loans for this analysis. Still, loans under $150,000 accounted for 86% of those approved through June — representing the experience of most PPP recipients. Among those smaller loans, 93% included a response for the numbers of jobs retained.
While there are 99 three-digit NAICS code industry groupings represented in the loan-level PPP data, only 85 have annual payroll data as reported by the SBA. These 85 formed the basis of the calculation.
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