Paycheck Protection Program Formally Closes with Nearly $24.5B Awarded to Michigan Small BusinessesJune 3, 2021
June 2, 2021
- Small business relief program was set up in early days of pandemic
- Program has approved more than 11.8 million loans totaling nearly $800 billion
- More than half of total loan dollars last year have been forgiven
As the COVID-19 pandemic looks to be heading toward a close in much of the U.S., so too has a small business relief program set up in the early, chaotic days as a means of bolstering businesses faced with a sharp drop in revenue.
The U.S. Small Business Administration on Tuesday announced that the Paycheck Protection Program had been officially closed to new loan applications.
First created in spring of 2020 as the coronavirus pandemic took hold, leading to a slew of government-mandated business closures, the PPP was part of the federal CARES Act relief legislation. The PPP aimed to offer potentially forgivable loans to businesses impacted by the pandemic for payroll and certain other costs including utilities and rent.
The program approved more than 11.8 million loans totaling nearly $800 billion to small businesses, nonprofits — as well as some larger businesses — since applications opened April 3, 2020, SBA Administrator Isabella Casillas Guzman said in a statement on Tuesday.
Nationwide, the SBA approved about $521.2 billion in PPP loans in 2020. Of that, just more than half — or $279.4 billion — has been forgiven, according to SBA data as of May 24.
The average loan size, nationally, for 2021 has been $42,000.
“I’ve heard story after story from small business owners across the country about how PPP funds helped them keep the lights on, pay their employees — and gave them hope,” Guzman said in the statement. “At the same time, millions of underserved businesses — particularly our smallest businesses and those owned by women and people of color — were left out of early rounds of relief. I’m proud of the work we did to begin to rectify these inequities — in 2021, 96 (percent) of PPP loans went to small businesses with fewer than 20 employees. Moving forward, we will continue to prioritize equity in all SBA’s programs and services.”
The early weeks of the program were marred by confusion, with business owners, bankers, and other advisers trying to learn the ins and outs of the nascent programs together.
Last summer, after an initial data drop by the U.S. Treasury Department of early loan recipients, many expressed anger — or “PPP shaming” — of larger businesses that had qualified for loans under the program. Some returned the loans.
Crain Communications, the Detroit-based parent company of Crain’s Detroit Business, received a PPP loan in the range of $5 million to $10 million.