- The Paycheck Protection Program is a key component of the federal government’s response to the economic devastation caused by the ongoing coronavirus pandemic.
- After the initial $350 billion allocated for the
small businessloans at the heart of the program was exhausted in just two weeks, Congress appropriated an additional $320 billion in funding.
- A recent Small Business Administration report shows where that second round of funding has gone so far.
- While the first round largely went to more rural states on a per-capita basis, much of the $175 billion from the second round that was dispersed as of May 1 has gone to larger, harder-hit states.
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The novel coronavirus has ravaged the US economy, with more than 33 million Americans filing for unemployment benefits over the last seven weeks.
The Paycheck Protection Program (
The PPP is intended to provide a lifeline for small businesses that have lost sales or been forced to temporarily shut down due to the pandemic.Advertisement
Last week, the Small Business Administration published statistics on the number and volume of small business loans made under the second round of the program so far. That report covers all loans approved between April 27 and May 1, amounting to about $175 billion of the new funding, with a state-by-state breakdown.
The current report shows that so far, some of the hardest-hit states, like New York, New Jersey, and California, as well as the District of Columbia, are receiving the most per-capita support from the second round of the program.
By contrast, the first round of funding appeared to largely favor midwestern states that at the time had been spared the worst of the outbreak. And the Institute for Local Self-Reliance found that first-round funds tended to go to states with a larger share of small banks, versus areas where the biggest
As banks figure out how to successfully navigate the SBA’s outmoded loan processing technology, the second-round funds seem to be smoothing out the disparities of the first.
In effect, rural areas had shorter lines and were served sooner, while urban centers had longer queues and are being served later. Advertisement
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