Around 1.66 million U.S. small businesses have secured $342 billion in loans under a federal coronavirus relief program, with construction companies taking the largest share.
The Paycheck Protection Program is the centerpiece of the $2 trillion CARES Act that Congress passed last month, offering partially forgivable loans to small businesses to cover payroll costs for eight weeks.
While the program has almost run out of the $349 billion allocated to it, and critics have said it has fallen short in the industries and states most battered by the coronavirus crisis, Treasury Secretary Steven Mnuchin proclaimed it a success.
“The PPP enjoyed broad-based participation across the country from lenders of all sizes and a wide array of industries and businesses,” he said in a news release.
Nearly three-quarters of loans were for under $150,000, “demonstrating the accessibility of this program to even the smallest of small businesses,” Mnuchin added.
According to a report by the Small Business Administration, the average loan size was $206,000 and 4,975 lenders, including many community banks, have participated. “Nearly 20% of the amount approved was processed by lenders with less than $1 billion in assets, and approximately 60% of the loans were approved by banks with $10 billion of assets or less,” Mnuchin said.
Construction firms accounted for the largest share (13.1%) of the pot, followed by professional services (12.6%), manufacturing (12.0%), and health (11.6). Hotels, restaurants and retailers — whose low-paid workers have been among the hardest hit by the crisis — got a combined share of 17.5%.
Companies in the three biggest U.S. states together accounted for about 23% of all loans so far, with $28.5 billion allocated to 135,000 businesses in Texas, $33.4 billion slated to go to 113,000 California businesses, and $20.3 billion to go to 81,000 firms in New York.
The Trump administration is negotiating with Congress over adding an additional $250 billion to the program. “We urge Congress to protect millions more American workers and their families by appropriating additional funding to support PPP,” Mnuchin said.