The Paycheck Protection Program was meant to be a financial lifeline for the little guy during the COVID-19 pandemic. But the largest eligible businesses were first in line.
New data from the Small Business Administration on this coronavirus relief effort shows that three-quarters of the money the agency handed out in loans of more than $1 million was gobbled up less than two weeks after the program launched in April.
For businesses trying to get loans under $50,000, the reverse was true. Nearly three-quarters of that money didn’t reach applicants until weeks or months later, after Congress allocated more funding. That meant firms with less money and less access to credit, which businesses owned by people of color and women disproportionately are, had to wait during an ongoing crisis. Some never managed to get the help.
The data, released late Tuesday after the Center for Public Integrity and other newsrooms sued to get it, offers a more complete picture of the forgivable loan program, which stopped accepting applications in August. The SBA initially released data that gave only a range for the value of the largest loans and did not identify the names or full addresses of businesses receiving smaller ones.
Public Integrity — a PPP loan recipient — and other news organizations filed Freedom of Information Act lawsuits. A federal judge ordered the agency to provide the public with those missing details.
All told, more than half the PPP money flowed to just 5% of recipients, the Washington Post reported.
Congress created the program to help small businesses pay employees. More than $520 billion in loans was distributed to 5.2 million firms.