Small Business Administrator Carranza: PPP saved millions of small businesses and American jobs
During a year in which all sectors of society grappled with the fight against a novel virus, COVID-19, and surviving sweeping government shutdowns, we can say with certainty that America’s small business sector has been bolstered by the Trump administration.
By giving millions of small businesses the short-term security and capital they need to keep tens of millions of employees on the payroll, the Paycheck Protection Program (PPP) accomplished its mission, and now our country’s small businesses are helping to lead America’s great economic comeback.
ONE small business in Salt Lake City, Utah, which manufactures automatic harvesters, has been able to renew its product and keep all its workers on the payroll; a custom metal fabricator in Greensboro, North Carolina, was able to continue paying its 15 workers their full salaries; the owner of an African-American juice cafe in Boston, Massachusetts kept all eight of her employees.
These Americans small businesses are among the 5.2 million borne by the PPP — a financial lifeline that kept payroll workers and small businesses viable.
In any case, the program achieved its goals: It gave small businesses the financial security they needed to adapt, while keeping tens of millions of small business employees on the payroll.
The vast majority of all PPP loans – 87 percent – were for $150,000 or less; 68 percent of all PPP loans were $50,000 or less and represented the smallest companies in America. The average loan size was $101,000.
75 percent of all PPP loans went to companies with nine employees or fewer – another indicator of the program’s success in supporting truly small businesses.
PPP loans have been made available to all small businesses and distributed fairly and equitably. Even so, critics in recent days have noted that 1 percent of borrowers are getting more than a quarter of PPP dollars. The clear and false implication of this criticism is that lending to larger companies has been at the expense of smaller companies.
The truth is that at the end of the program in August, more than $133 billion in funding remained. Not a single qualifying company was displaced by a loan granted to another company.
10,000 RESTAURANTS CLOSING IN 3 MONTHS AMID CORONAVIRUS ‘FREE FALL’, INDUSTRY GROUP FINDCongress designed the PPP with the intention of protecting as many small business employees as possible. The amount of the loans was determined by the company’s monthly payroll. Small businesses with larger workforces naturally qualified for larger loans.
In general, PPP loans were limited to companies with 500 or fewer employees. However, the CARES Act also established other eligibility requirements for lending to restaurant chains, hotels and other businesses, including some with more than 500 employees.
Congress granted this support to franchisees in recognition of their unique corporate structure and the losses they have suffered during the pandemic. Furthermore, franchise employees are no less important to this economy than other small business employees.
Indeed, the PPP’s success is measured most clearly by its support of tens of millions of American jobs: dishwashers and prep cooks, technical analysts and statisticians, line workers and mechanics, and the hundreds of other small business employees I’ve had the incredible privilege of working these past few months hold true.
I saw gratitude in the eyes of the employees and relief in the eyes of the small business owners; The PPP meant workers could continue to rely on a paycheck to support their families, and it meant small business owners could keep their greatest asset – their employees.
The US Small Business Administration is actively working with lenders across the country to waive the PPP loans. The SBA has already committed $50 billion in loan forgiveness payments. We intensify the process daily to forgive as many PPP loans as possible – while ensuring compliance with program requirements and proper taxpayer money control.
Our work to support the small business sector continues with unrelenting intensity and dedication, and we will not rest until America’s small businesses are once again economic drivers in their communities.
Jovita Carranza is the Administrator of the US Small Business Administration.