SBA says PPP loans are getting smaller in the second round of lending
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The Small Business Administration just released new data on its Paycheck Protection Program. The SBA says it has approved over $510 billion in forgivable loans, which are meant to keep people on payrolls, over both rounds of the program.
Now, that average has dropped to about $120,000.
“It was cut in half or more in every single state between rounds one and two,” said Curt Long, chief economist at the National Association of Federally-Insured Credit Unions.
He says the SBA made some changes after the second round started, such as temporarily giving smaller lenders exclusive access to the funds.
“So that allowed a lot of credit unions and other small lenders to get those applications that had been stacking up processed, Long said.
Smaller businesses with smaller loan requests had a lot of competition for loans in the first round, says Luke Wake, senior staff attorney with the National Federation of Independent Business.
“‘Bigger small businesses,’ those closer to the 500 employee mark, were snatching up those loans,” he said.
Wake says the falling average loan size is a sign that smaller businesses are finally getting loan approvals.
COVID-19 Economy FAQs
Will the federal government extend the extra COVID-19 unemployment benefits?
It’s still unclear. Congress and President Donald Trump are deciding whether to extend the extra $600 a week in unemployment benefits workers are getting because of the pandemic. Labor Secretary Eugene Scalia believes the program should not be extended, and White House economic adviser Larry Kudlow said the additional money is disincentivizing some workers from returning to their jobs. Democrats want to keep providing the money until January.
As states lift restrictions, are people going back to stores and restaurants?
States have relaxed their restrictions, and many of us have relaxed, too. Some people have started to make exceptions for visiting restaurants, if only for outdoor dining. Some are only going to places they trust are being extra cautious. But no one we’ve talked to has really gone back to normal. People just aren’t quite there yet.
Will surges in COVID-19 cases mean a return to lockdowns?
In many areas where businesses are reopening, cases of COVID-19 are trending upwards, causing some to ask if the lockdowns were lifted too soon, and if residents and businesses might have to go through it all again. So, how likely is another lockdown, of some sort? The answer depends on who you ask. Many local officials are now bullish about keeping businesses open to salvage their economies. Health experts, though, are concerned.
You can find answers to more questions here.
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