One quarter of the available Paycheck Protection Program loans were made in the first three weeks after the COVID-relief program reopened last month, federal data shows.
More than 891,000 borrowers received a total of $72.7 billion from banks and other private lenders between Jan. 11-31, according to the U.S. Small Business Administration, which oversees the program. That’s 26% of the more than $284 billion in federal loan guarantees authorized by Congress in late December.
"The Paycheck Protection Program continues to provide a vital lifeline to Long Island small businesses and nonprofits as well as those across New York State," said Beth L. Goldberg, director of SBA's New York district, which includes Nassau and Suffolk counties. She said on Wednesday that the loan funds are "allowing workers to stay on the payroll and connected with their health care" plans.
Only 5% of the PPP loans made last month appear to have gone to minority- and women-owned businesses and those located in low-income neighborhoods, the data shows.
SBA had set aside Jan. 11-14 to approve loan applications for such borrowers via community financial institutions. The agency was responding to criticism that the smallest of small businesses had difficulty securing PPP loans last year. The institutions made 46,090 loans, totaling $3.4 billion, or 5% of all loans so far. The average loan amount is $74,594, according to the data.
Most of the PPP loans — $68 billion, or 93% — are second loans to borrowers who exhausted their first one last year. The average loan size is $102,228.
To be eligible for a second loan, the borrower must have 300 or fewer employees and report a revenue decline of 25% or more in one three-month period last year compared with the same period in 2019. The second loan is up to $2 million per applicant, said Matt Coleman, a spokesman for SBA's Region II, which includes New York State.
First-time borrowers shared $4.8 billion in loan funds last month and the average loan size is $21,157. First-time loans are up to $10 million and the applicant must have 500 or fewer employees, Coleman said.
The sectors receiving the most PPP loans in January were hotels/restaurants, construction and professional/technical services.
New York State was third behind California and Texas in the number of approved loans: 51,667 loans, totaling $5.1 billion.
SBA did not release data for Long Island.
The latest version of the PPP ends on March 31, though the federal loan guarantees are being used more slowly than in April when the first allotment of $349 billion was exhausted in two weeks.
PPP loans come with a 1% interest rate and five-year term. They are fully or partially forgivable if borrowers meet certain criteria.
Goldberg said small businesses and nonprofits can find PPP lenders at nwsdy.li/MATCH if their bank isn't participating in the loan program. Counselors at the Small Business Development Centers at Farmingdale State College and Stony Brook University can "assist potential applicants with paperwork and answering questions" about the PPP, she said on Wednesday.
More information also is available at nwsdy.li/SBAPPP.
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PPP 2.0 IN NYS
Number of approved loans between Jan. 11-31: 51,667
Total amount: $5.1 billion
Average loan amount: $98,757
Note: Figures include first-time loans and second loans to existing borrowers.
SOURCE: U.S. Small Business Administration
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