Upper Midwest, Great Plains states have fared best in SBA emergency loan program
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The House is weighing a new round of $320 billion in funding for the Paycheck Protection Program emergency loans for small businesses after the Senate approved the measure on Tuesday.
The first round ran out of its $350 billion appropriation last week.
Data from that first round suggest states in the Great Plains and upper Midwest had the most success in securing the program’s emergency loans.
According to data from the Small Business Administration, states with smaller populations tended to secure more loan money per capita than more populous coastal states. States in the Great Plains and upper Midwest received higher shares of the PPP loan pool than their shares of the total U.S. population.
|Rank||State||Share of total approved PPP dollars||Share of U.S. population||Ratio|
Bankers say close relationships between businesses and bankers in states with relatively small populations made the program easier to administer.
On the day the loan program kicked off in early April, Jennifer Davidson sent an email to the bank that works with the financial literacy nonprofit she runs in Lincoln, Nebraska. The email contained the PPP application form, printouts of payroll expenses, and other documents.
About a week later, the $30,000 loan was approved. The money showed up in her nonprofit’s bank account the next day.
“It was so easy,” Davidson said. “I didn’t see anyone in person at all. It was all 100% online.”
Davidson’s experience was far from universal. Many businesses interviewed by Marketplace reported trouble applying for PPP loans because they didn’t have close relationships with banks.
Davidson has a close relationship with her bank. She says that’s just how things are done in Nebraska.
“We know our bankers,” Davidson said. “It’s just less populous.”
That close relationship helped bankers guide their clients through the necessary paperwork to quickly apply for the emergency loans.
“That helped the Midwestern banks specifically,” said Eric Hallman, president and CEO of the Nebraska Independent Community Bankers.
|Rank||State||Loans per 1,000 population|
There was also less competition for loans in the Great Plains and upper Midwest.
The San Diego-based Bank of Southern California issued about 950 loans before the first round of funding ran out. Nathan Rogge, the bank’s president and CEO, said that’s a small number, given that California’s the most populous state in the union.
“It just put a lot of strain, and I think that translated into fewer people getting access to the program,” Rogge said.
Industries in the Great Plains and Upper Midwest have also experienced their fair share of catastrophe in recent years. Drastic flooding in the region last year and the pressures of the trade war have taken a toll on the heavily agricultural economy there.
As a result, agricultural, food processing and transportation industries are more familiar with the process of applying for government aid, said Scott Fuess, an economics professor at the University of Nebraska-Lincoln.
“Recognizing another stress coming along, [those businesses] were quick to reach out for the relief that this program offers,” Fuess said.
Plus, Fuess said banks in the region have plenty of experience with the roller-coaster economics of farming.
COVID-19 Economy FAQs
It’s still the question on everyone’s minds: What’s going on with extra COVID-19 unemployment benefits?
The $600-a-week payments have ended, officially, as of July 31. For now, there is no additional federal pandemic unemployment assistance. House Democrats want to renew the $600 payments. Senate Republicans have proposed giving the unemployed 70% of their most recent salary by this October, when state unemployment offices have had time to reconfigure their computer systems to do those calculations. Until then, jobless workers would just get another $200. But, nothing has been agreed upon yet.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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