Loans – Feds offer look at who’s getting PPP loans this time, and how much
Updated details of the federal government’s primary relief program have begun to emerge.
Demand for the Paycheck Protection Program has lagged what was seen last spring. That’s for a variety of reasons, most notably new legislative requirements that limit the number of businesses that can obtain loans compared to last year, and a mandate that companies demonstrate a decline in revenue.
Data released Tuesday evening by the U.S. Small Business Administration provides the most comprehensive look at who’s being approved for loans and at what size since the PPP began again earlier this month.
How does demand for PPP compare with what was seen last spring?
It’s markedly less, but also quite different. The initial $349 billion allocated to the program in early April was gone by April 16. The program relaunched weeks later with a fresh $310 billion and eventually ended in August with several hundred million dollars still in the pot, as borrowing slowed greatly in the summer.
This year the program formally relaunched on Jan. 11 with an additional $284 billion. The first week was limited only to lending institutions focused on serving minority and other under-served populations before opening the following week to all qualifying lenders and businesses.
Since the program began anew earlier this month — and going though Jan. 24 — the S(BA) has approved 400,580 loans nationwide, totaling just over $35 billion. Michigan borrowers during that time have nabbed 13,171 loans totaling just over $1.5 billion.
65 percent of the number of loans — 262,778 — in this rebooted round have been $50,000 or under. The overall average loan size stands at $87,000, according to the S(BA).
Which lenders are playing a major role in this latest round of PPP?
Per the S(BA) data a total of 4,526 lenders are taking part in the January 2021 program. A total of 5,448 lenders have been involved over the life of the program.
Buffalo, N.Y.-based M&T Bank stands as the largest PPP lender so far this year.
Trailing just behind M&T is Fifth Third Bank. The Cincinnati-based lender has 189 offices in Michigan and stands as the seventh-largest bank in Michigan by deposits, based on Crain’s 2019 data.
As of Sunday, Fifth Third had approved 3,835 loans totaling $539.7 million, according to the S(BA).
Bank of America and Citizens Bank are also banks that are among the S(BA)‘s top 10 for PPP lending with significant presences in Michigan.
Which industries are jumping at the opportunity for this latest round of PPP?
Perhaps not surprisingly, the hospitality industry has made for the largest chunk of borrowers so far. Accommodation and food service companies, among the most common victims of state and local shutdown orders, represent 19 percent of PPP loans in this year’s round, having been approved for 45,785 loans totaling over $6.5 billion.
Trailing hospitality-focused businesses in seeking loans are construction and manufacturing firms; professional, scientific and technical services; and health care and social assistance companies, according to the S(BA).
What’s known about the demographics of those applying for PPP loans?
Not much as of yet.
The vast majority of borrowers are not providing their gender, ethnicity or veteran status, according to the data released by the S(BA).
For instance, fewer than 6,000 loans have been approved for businesses identifying as Black-owned, while almost 48,000 loans have been approved for business owners identifying as white.
But 327,000 loans totaling nearly $30 billion have been approved for businesses where the owner did not identify their ethnicity.
A lack of ethnic diversity among borrowers has been a key criticism of the PPP and stood as a major reason for the narrow reboot earlier this month.
A Detroit Free Press report last July found that of 785 Michigan restaurants that got PPP loans of over $150,000 in the first rounds, only one identified itself as Black-owned.
