Coastal states win greater share of PPP’s second round
Share Now on:
When the first round of the Paycheck Protection Program ended, we reported that different parts of the country saw very different success rates in getting loans approved. Now, we’re learning more about how the second round of funding is shaping up, and it’s pretty clear that the states that did worst in round one are seeing success in round two.
During the first round of the PPP, Alexandra Mason had a hard time getting a loan. She runs a marketing consultancy in Washington, D.C. One bank rejected her application. Another approved the request but never sent the money. But after round two kicked off last week, she applied again.
“Within three days, including a weekend, my approval came through and was funded,” Mason said.
As of May 1, Washington, D.C.; New York, New Jersey and California are getting greater shares of loan approvals, relative to their shares of the U.S. population.
John Kabateck, California state director of the National Federation of Independent Business, said those states benefited from new guidance favoring applications from smaller companies.
“Too much of this money was going out to businesses that needed it less,” Kabateck said.
Customers in those states are also more likely to bank with larger institutions, according to Ernie Tedeschi, an economist with Evercore ISI.
In the first round of funding, that was a disadvantage, since community banks in rural states saw the most success. But the second is different.
“That trend has been reversed a little bit,” Tedeschi said.
Bigger banks had more advantages in the second round, like the option to upload applications in bulk. Tedeschi said banks in coastal states likely had time to process loans after the first round of funding ran dry.
“You know, sorta finalizing applications and getting them ready for the eventuality of more appropriations coming,” Tedeschi said.
The Small Business Administration says 53% of approved dollars in the second round came from banks with more than $50 billion in assets.
COVID-19 Economy FAQs
What’s going on with extra COVID-19 unemployment benefits?
The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.
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.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.