You’ve probably seen the headlines this week about the government’s release of more details about who received money from the Paycheck Protection Program (PPP). There were some surprises in there about the amount lent to organizations like private equity and wealth management firms, as well as not for profit organizations. But much of the $521.5 billion that has been distributed thus far has gone to small businesses in industries that are truly hurting as a result of the COVID-19 pandemic.
Let’s take a closer look at the PPP approvals through June 30.
Dollars and states
According to the Small Business Administration (SBA), the majority of PPP loans — 3.3 million of the 4.9 million loans, or 66.8 percent of loans — have been for $50,000 and under. To date, the average loan size is approximately $107,000, and 86.5 percent of loans were for less than $150,000.
Across all 50 states, between 72 percent and 96 percent of small business payroll was covered by PPP loans through June, with the highest percentages in Florida (96 percent), South Dakota and Utah (93 percent), and Nebraska (92 percent), and the lowest percentages in Virginia (72 percent) and Massachusetts (73 percent).
A look at the PPP lenders
Bankers are busy right now, and it’s no wonder. Examining the 5,461 lenders who have been working to distribute these PPP funds reveals some interesting facts. For example, 4,273 banks have approved 4,409,646 PPP loan applications worth $496.7 billion, and 934 credit unions have approved 196,010 PPP loans worth $9.7 billion.
While it isn’t surprising that JP Morgan, Bank of America, Truist, PNC, and Wells Fargo are the top five PPP lenders, originating 17 percent of total PPP loan dollars, the vast majority of PPP lenders (82.4 percent or 4,510 lenders) have less than $1 billion in assets. In fact, 2,623 of the 5,461 PPP lenders have $100 to $500 million in assets, and another 1,117 lenders have $100 million or less in assets.
Which industries are borrowing
Now, let’s take a look at the specific industries that are benefiting from the PPP program. June’s data doesn’t paint a substantially different picture than data from earlier months. For example, in April, the top 10 sectors receiving PPP dollars were:
- Construction with 177,905 loans worth $44.9 billion, or 13.12 percent of the total PPP dollars lent
- Professional, Scientific, and Technical Services with 208,360 loans worth $43.3 billion, or 12.65 percent
- Manufacturing, 108,863 loans worth $40.9 billion or 11.96 percent
- Health Care and Social Assistance, 183,542 loans worth $39.9 billion or 11.65 percent
- Accommodation and Food Services, 161,876 loans worth $30.5 billion or 8.91 percent
- Retail Trade, 186,429 loans worth $29.4 billion or 8.59 percent
- Wholesale Trade, 65,078 loans worth $19.5 billion or 5.69 percent
- Other Services (except Public Administration), 155,319 loans worth $17.7 billion or 5.17 percent
- Administrative and Support and Waste Management and Remediation Services, 72,439 loans worth $15.3 billion or 4.47 percent
- Real Estate and Rental and Leasing, 79,784 loans worth $10.7 billion or 3.14 percent
Compare this to the June data where the top 10 industries getting PPP loans were:
- Health Care and Social Assistance with 506,263 loans worth $67.4 billion, or 12.92 percent of the total PPP dollars lent
- Professional, Scientific, and Technical Services, 638,221 loans worth $66.4 billion, or 12.74 percent
- Construction, 466,221 loans worth $64.6 billion, or 12.38 percent
- Manufacturing, 229,591 loans worth $54.0 billion, or 10.36 percent
- Accommodation and Food Services, 367,502 loans worth $42.1 billion, or 8.07 percent
- Retail Trade, 450,181 loans worth $40.4 billion, or 7.74 percent
- Other Services (except Public Administration), 531,572 loans worth $31.1 billion, or 5.97 percent
- Wholesale Trade, 167,237 loans worth $27.7 billion, or 5.32 percent
- Administrative and Support and Waste Management and Remediation Services, 240,947 loans worth $26.5 billion, or 5.08 percent
- Transportation and Warehousing, 191,609 loans worth $17.1 billion, or 3.28 percent
As you can see, most of the industries remained the same, the order was simply shuffled.
Not-for-profits benefit too
Interestingly, non-profit organizations are not typically eligible to receive SBA-guaranteed small business loans. However, with the PPP, an exception was made, allowing numerous non-profit organizations to apply for loans to help keep their staff employed. Per the June data, a total of 133,686 loans totaling $13.5 billion were approved for not-for-profit organizations. These borrowers ranged from churches to museums to groups like the Girl Scouts.
With $131.9 billion still remaining in the kitty and the application deadline extended to August 8, it will be interesting to see who else reaps the benefits of the program.
>> Learn more about how COVID-19 is impacting specific sectors and industries by visiting our free Vertical IQ COVID-19 webpage.