Paycheck Protection Program (PPP) – By the Numbers

Blog
July 14, 2020

You’ve no doubt heard of them – the “PPP loans”, a key provision of one of the largest economic stimulus packages passed by Congress in United States’ history (more information here). The program allowed American small businesses and certain nonprofits to apply for loans up to $10 million to incentivize maintaining employees on payroll during the COVID-19 pandemic. The loans are potentially 100% forgivable if certain qualifications are met by the entities.

As of July 9, 2020, the Small Business Administration (SBA) has approved 4,897,108 PPP loan applications totaling $521 billion in economic relief. Below are some interesting metrics derived from data made publicly available from the SBA.

Number of Loans by Tier

The major goal of the PPP loan program was to provide immediate economic relief to American small businesses, generally defined by the SBA as any business or nonprofit with less than 500 employees. The amount of the loan received was dependent on a variety of factors – the largest being the number of employees and amount of monthly payroll. For example, a small ‘mom and pop’ bakery with 3-4 employees would likely qualify for a loan under $150,000, while a large bakery business with 400 employees would likely qualify for a loan in the $5-10 million range.

Here’s the number and breakout of loans disbursed by the SBA by loan tier:

PPP Loans Approved Over Time by Loan Tier

Based on data released from the SBA, it appears ‘larger’ small businesses (i.e. – those applying for higher tier PPP loans) were able to get their loan applications approved earlier in the application window versus smaller businesses – especially compared to those applying for loans <$150,000. The reasoning for this is unknown, but is likely due to delayed applications by such smaller entities for loans. Smaller entities are less likely to have established banking relationships or a dedicated administrative function – both of which were key in applying for the loans.

The following chart illustrates the aggregate total percent of loan applications approved over time, broken out by loan tier, of total loan applications approved between April 3, 2020 and June 30, 2020:

PPP Loans by State

Qualifying entities located in the United States or its territories could apply for PPP loans. Here’s an illustration of the number of PPP loans approved by state:

It’s no surprise states with higher populations received most PPP loans. Below is a illustration of the dollar amount of PPP loans disbursed (estimated*) by state population:

* The SBA did not release specific dollar amounts of  loans above $150,000. Total loan dollar amounts above $150,000 include estimated figures of loans within each loan tier, which approximate total PPP loans disbursed.

The below illustration shows the percent of small businesses who received PPP loans, by state. The number of ‘small business employers’ used in our percentage calculation reflects 2019 data, as 2020 data has not yet been released by the SBA.

PPP Loans by Lender

In order to apply for a PPP loan, businesses and nonprofits were required to apply with a qualified SBA lender or any federally insured bank or credit union. Lenders received anywhere between 1% and 5% of total loan proceeds as fees. This means, at a bare minimum, lenders received $5.2 billion in fees (1% of $521B total PPP loans approved) up to an estimated $19.5 billion based on estimated amounts of loans disbursed. The figure may be even higher, as lenders were able to keep fees for loans disbursed which were later returned to the SBA; PPP loans returned to the SBA are not included in the data set released.

The following 15 institutions processed the most PPP loan applications:

Types of Organizations

All for-profit and certain non-profit organizations with 500 employees or less (along with other restrictions) were allowed to apply for PPP loans. The following chart represents the self-reported business types of all loan applicants. The data is presented as received from the SBA, as it is unclear what the differentiation is between several categories (e.g. – ‘Self-Employed Individuals’ is usually synonymous with ‘Sole Proprietorships’, and a ‘Sole Proprietorship’ could also be a ‘Limited Liability Company’).

Jobs Saved

Perhaps the most important statistic of the PPP loan program is the number of ‘jobs saved’. According to the SBA, almost 60 million Americans were employed by small businesses in the United States at the end of 2019. Assuming these numbers remained comparable in early 2020, the PPP loan program provided funding to support almost 51 million of those jobs during the COVID-19 pandemic.

The following illustrates the number of jobs saved by the PPP loan program by state:

The following illustrates the number of jobs saved by the PPP loan program as a percentage of 2019 small business jobs, by state:

The state of Utah had 572,000 small business jobs at the end of 2019 and 797,000 jobs saved by the PPP loan program, according to the SBA (“139% jobs saved”). It is unclear whether this is an error in reporting by the SBA, an anomalous increase in jobs in the state of Utah in early 2020, or an other unusual situation.

To find more resources and guidance on the Paycheck Protection Program, head over to our COVID-19 Resource Hub.