Texas

Texas businesses receive $62.7 billion in PPP funds

The COVID-19 pandemic and the resulting economic crisis have created an unprecedented financial strain across the US, prompting the government to offer economic relief packages at all levels, from personal-use stimulus checks to local state-level recovery funds. But the Paycheck Protection Program (PPP) is one of the most memorable.

To help businesses stay afloat, a government initiative has allowed companies with fewer than 500 employees to apply for soft loans. With mandatory store closures, social distancing guidelines and increased cleaning requirements, many businesses are facing a series of difficult choices, such as laying off some employees to pay the wages of others, or closing their doors forever to avoid a very uncertain future. The PPP loans were designed to help businesses keep their doors open with less stress, retain employees, and support the struggling local economy.

In the first of three rounds from April 3, 2020 to August 8, 2020, the PPP disbursed $525 billion to needy small businesses and eventually disbursed almost $800 billion in loans by the end of the program in mid-2021. While US Treasury Department economists welcome the program to save almost 19 million jobs by December 2020, others argue that the real number is much smaller, closer to 1.4 million to 3.2 million.

PPP loan recipients initially had to spend 60% of the allocated funds on payroll to be eligible for loan forgiveness, as the funds were for businesses to pay their employees, avoid layoffs, and stay in business. For many small businesses, especially those with fewer than 10 employees, it makes sense for a small loan to meet these goals, and more than two-thirds of PPP loans, or 66%, were approved for less than $25,000. However, since companies with up to 500 employees were eligible for PPP funding, many small businesses were approved for much larger amounts. While only 2% of PPP loans were approved for between $100,000 and $124,999, 10% were approved for more than $125,000. The balance of loans fell from $25,000 to $99,999: 11% from $25,000 to $49,999, 5% from $50,000 to $74,999, and 3% from $75,000 to $99,999.

Businesses from every industry could apply for a PPP loan, but some areas were approved to receive more funds than others. Construction businesses with fewer than 500 employees received the most money overall, receiving almost $98 billion in PPP loans. The health and social care industry, and the professional, scientific, and technical industries were not far behind, receiving approximately $96 billion and $94 billion, respectively. Accommodation and catering services received the fourth largest amount of PPP loans overall and the first in comparison to smaller GDP.

Unsurprisingly, construction tops the list: as existing projects have been put on hold, new business has slowed, and disruptions and shortages have impacted supply chains, construction has become one of the hardest-hit industries from the pandemic. The same is true for small businesses in the accommodation and catering industry, which have had to deal with a combination of plummeting demand, staff shortages and supply chain disruptions, among other things.

The funds that were distributed through PPPs also varied by state due to differences in the impact of COVID-19, politics, small business density, and other local economic factors. Generally, states in the northern half of the US, such as Dakota, New York, Massachusetts, and Illinois, received more PPP funds per capita than states in the southern half of the country. North Dakota received the most per capita PPP funds at $3,734. New York and South Dakota were second and third in per capita PPP funds at $3,062 and $3,048, respectively. At the opposite end of the spectrum, West Virginia ($1,458), New Mexico ($1,598), and Arkansas ($1,651) received the least amount of PPP funding per person.

The data used in this analysis comes from the US Small Business Administration’s Office of Access to Capital. To determine the places that received the most Paycheck Protection Program (PPP) funds, Smartest Dollar researchers calculated the total amount of PPP funds per capita. In the event of a tie, the seat that received the higher total PPP funds was ranked higher.

Here is a summary of data for Texas:

  • Total PPP funds per capita: $2125
  • Total PPP funds: $62,746,149,417
  • Average PPP loan amount: $20,750
  • Forgiven Share of Approved PPP Funds: 95.3%
  • Industry sector with the largest amount of PPP funds: Professional, scientific and technical services

For reference, here are the statistics for the entire United States:

  • Total PPP funds per capita: $2388
  • Total PPP funds: $792,611,806,528
  • Average PPP loan amount: $20,689
  • Forgiven Share of Approved PPP Funds: 95.2%
  • Industry sector with the largest amount of PPP funds: Building

For more information, detailed methodology, and full results, you can find the original report on the Smartest Dollar website: https://smartestdollar.com/research/cities-that-took-the-most-ppp-money.

Content source

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button