US says small business programme has loaned more than $520bn

The US government said its small business bailout programme has kept 51.1 million people in work and loaned more than $520bn to ailing companies, as it released a highly anticipated database showing who got the money. 

The Paycheck Protection Program is expected to come under intense scrutiny after the names of businesses and self-employed people who got more than $150,000 under the scheme were released on Monday.

The data does not include information on companies that received PPP loans but ended up cancelling or returning them, either because they realised they could not meet the terms of the loan or because they had been told they were not one of the programme’s intended beneficiaries.

According to the Small Business Administration, a total of 170,000 loans — amounting to about $38.5bn — had been returned by the end of May. Companies that gave back the money included restaurant chains Shake Shack and Ruth’s Chris Steak House, which were initially granted loans totalling $10m and $20m, respectively, despite being publicly listed and able to seek funding from other sources.

The release of PPP data comes amid questions about the future of the programme, which was this weekend extended until August 8. However, only companies that have not yet accessed the programme will be eligible for the remaining funds, which are just under $132bn.

Any companies forced to shut down a second time due to the new spike in US coronavirus cases will be forced to wait for new action from Congress if they hope to tap the funding a second time and keep employees on payroll.

In total, the Small Business Administration and US Treasury have issued close to 4.9m loans totalling $521bn over the course of three months. The loans were disbursed via the country’s banks, which in turn have sold many of them on to the Federal Reserve.

The loans can be forgiven if companies use the money to keep or rehire employees or for certain other essential business expenses.

More than 85 per cent of the loans issued were for less than $150,000. 

The SBA and Treasury claim that the programme put 51.1m Americans back on companies’ payrolls is based on employment figures submitted by the companies that received PPP loans. In total, US small businesses employ 59.9m Americans, according to the US census. 

Bar chart of showing Smaller banks made higher PPP loans relative to total assets

The biggest US bank, JPMorgan Chase, was the biggest lender through the programme, arranging $29bn of loans despite a delayed launch of its platform. Bank of America, the only large bank that was ready to accept applications from the programme’s April 3 launch date, was the second biggest, with $25bn. 

The data also shows how the big banks tried to work with more than just their largest borrowers, following a backlash for their involvement with companies like Shake Shack. The average loan amount from JPMorgan’s borrowers was under $108,000, while BofA’s was just over $75,000. 

Truist and PNC, two of America’s largest domestic banks who loaned the third- and fourth-highest amounts in the programme, had average loan sizes of $166,000 and $179,000, respectively. 

Truist and PNC also loaned almost twice as much relative to the size of their domestic US business as JPMorgan and Bank of America.