Companies have repaid $ 30 billion in PPP loans to small businesses
Steven Mnuchin, U.S. Secretary of the Treasury, speaks during a Senate Committee on Small Business and Entrepreneurship hearing in Washington, DC, United States, Wednesday, June 10, 2020.
Al Drago | Bloomberg | Getty Images
Companies have repaid or canceled more than $ 30 billion in loans approved under the government’s emergency paycheck protection program, a senior administration official said on Monday.
The multibillion dollar figure adds new context to the PPP debate and information on how many private companies have applied for the loans.
State-owned companies, which typically had to disclose their receipt or request for a PPP loan in a government file, returned only about $ 430 million, according to data analytics firm FactSquared.
The PPP, created by the CARES Act in March, was designed to help small businesses cover labor costs during the Covid-19 epidemic and a historic contraction in US trade.
But the program came under scrutiny almost upon approval, as applicants drained its initial $ 350 billion in about two weeks and it was revealed that state-owned companies had secured loans while hundreds thousands of small businesses looking for relatively small amounts remained in need.
Since then, the SBA has worked to fill this gap, saying large state-owned companies “with substantial market value and access to capital markets” are not eligible for the program. Companies such as Ruth’s Hospitality Group and the Potbelly sandwich chain have followed Shack Shack by returning their PPP funds.
Other businesses may have decided to repay the loans because they could not meet the initial spending conditions of the program because their businesses remained closed.
An overview of the size of the PPP loans repaid was to be accompanied by an update from the Small Business Administration on the progress of the program to date.
The administration said it had allocated some $ 520 billion through 4.9 million loans until the end of June, with the average loan size estimated at $ 107,000.
After pushing back requests to disclose the identity of recipients, the SBA said it would release the names of companies that received at least $ 150,000. Yet 86.5% of the loans went to businesses that requested less than $ 150,000.
The update came just two days after President Donald Trump signed a bill on Saturday extending the deadline for submitting federal program nominations. About $ 130 billion of the $ 670 billion set aside for the PPP has still not been claimed.
Small business owners now have until August 8 to apply for P3 loans.
Some administration officials, such as Treasury Secretary Steven Mnuchin, say they hope to work with Congress to pass additional and more targeted stimulus legislation by the end of July.
“We support additional legislation and look forward to working with the House and the Senate on it,” he told the House Financial Services Committee on Tuesday. Mnuchin said his efforts would focus on “reallocating” the $ 135 billion that remains available under the PPP.
– CNBC’s Hugh Son, Kate Rogers and Betsy Spring contributed reporting.
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