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$134B in untapped loan guarantees remain as PPP applications end

The Paycheck Protection Program allowed small businesses to

The Paycheck Protection Program allowed small businesses to borrow at 1% interest, and loans could be forgiven if at least 60% is used for payroll expenses.   Credit: AP/Tony Dejak

Nearly $134 billion in Paycheck Protection Program loans went unused despite multiple extensions of the application deadline and a last-minute push by lenders, federal data show. 

The federal government’s flagship coronavirus-relief program ended Aug. 8 with banks and other private lenders making a total of 5.2 million federally-guaranteed loans worth $525 billion, according to the U.S. Small Business Administration, which oversees the PPP with the Department of Treasury. The average loan amount was $100,729.

The program began on April 3 and in just two weeks exhausted its $349 billion in loan guarantees. Lending resumed on April 27 after Congress authorized a further $310 billion, and the deadline for loan applications was moved forward several times.

The $134 billion in unused PPP loan guarantees as of Aug. 8 is after loan cancellations, increases and decreases in loan amounts and lenders' fees. The amount is higher than the almost $132 billion in unused guarantees recorded on June 30, the previous application deadline.

"No non-regular activity would account for this," said Matt Coleman, a spokesman for SBA's Region II, which includes New York State, when asked on Wednesday why the number of unused loan guarantees went up between June 30 and Aug. 8 despite an additional 326,740 loans having been made. He said nothing "unusual" took place. 

The Small Business Majority, an advocacy group in Washington, said Congress and President Donald Trump should have extended the PPP deadline again.

“While PPP is far from perfect, it is a needed program for millions of small businesses,” said the group’s founder John Arensmeyer. Congress should have “loosened requirements for small businesses to take a second, forgivable installment of PPP. … Otherwise, we are talking about entire communities at risk of losing their small business footprint,” he said.

New York State placed No. 3 in terms of total loan funds, after California and Texas, according to SBA. Nearly 348,900 loans were made to New York borrowers, totaling $38.7 billion as of Saturday.

Nationwide, 5,460 banks, credit unions, Community Development Financial Institutions and other private lenders made PPP loans. Most had assets of less than $10 billion.

JPMorgan Chase Bank was the biggest PPP lender in terms of dollar amount, with 280,185 loans totaling $29 billion. Bank of America followed with 343,626 loans totaling $26 billion, and PNC Bank with 73,925 loans at $13 billion.

The industry sectors receiving the most loan dollars were health care/social services, professional/technical services, construction, manufacturing and hotels/restaurants.  

Locally, 65,426 PPP loans were made in the four congressional districts that encompass most of Long Island as of June 30, the most recent available data. Law offices, accounting firms and other similar professional offices received 9,515 loans or 15%, according to a Newsday analysis.

PPP loans are for up to $10 million at 1% interest with a five-year term.

Borrowers generally must have 500 or fewer employees, and loans may be forgiven completely if at least 60% of the money is used for payroll expenses. Newsday has received a $10 million loan.

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