SBA’s Paycheck Protection Program (PPP) loans provided nearly $800 billion dollars of crucial financial support to over 8.5 million businesses and nonprofit organizations in the face of the COVID-19 pandemic. But as the proverb goes, “all good things must come to an end.” SBA closed the PPP doors to new loan guaranty applications at the end of May 2021 and released a closing statement on the program’s success.
On June 1, SBA Administrator, Isabella Casillas Guzman, released a statement regarding the closure of the PPP application window at the end of May. As you probably know, the PPP was one of the first (but not the last) COVID-19 economic disaster relief programs implemented by the federal government to support the nation’s economy. Specifically, the PPP provided emergency funds to small businesses and nonprofits that were affected by the COVID-19 pandemic.
In her statement, Ms. Guzman praised the program’s widespread success. She said:
The Paycheck Protection Program provided over 8.5 million small businesses and nonprofits the lifeline they needed to survive during a once-in-generation economic crisis. I’ve heard story after story from small business owners across the country about how PPP funds helped them keep the lights on, pay their employees — and gave them hope[.]
But Ms. Guzman also addressed some of the PPP’s shortcomings, explaining:
At the same time, millions of underserved businesses – particularly our smallest businesses and those owned by women and people of color – were left out of early rounds of relief. I’m proud of the work we did to begin to rectify these inequities — in 2021, 96% of PPP loans went to small businesses with fewer than 20 employees. Moving forward, we will continue to prioritize equity in all SBA’s programs and services.
According to SBA, the PPP “supported the smallest of small businesses with 32 percent of the loans going to Low-and-Moderate Income (LMI) communities.” SBA added that “PPP loans in 2021 averaged $42,000, another indicator of targeted relief to the smallest small businesses.” Finally, SBA also noted the “pivotal role” that Community Financial Institutions played in the PPP by lending crucial funds to underserved communities, “providing 1.5 million loans totaling $30 billion.”
PPP’s stats are impressive to say the least. Sure, there were some issues in the eligibility vetting process–to the extent that many companies simply returned their loans. But regardless, the impact that the PPP had on the nation’s economy and well-being during a time of crisis and uncertainty is nothing short of monumental. For information on PPP loan forgiveness, check out our prior blog,
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