The second round of the U.S. Small Business Administration’s Paycheck Protection Program has seen more loans approved for lesser amounts, an indication that smaller businesses are getting assistance.
The average size of a PPP loan was $206,000 in the first round that ended April 16 after the SBA went through the initial $349 billion in just two weeks.
In the second round, which started April 27 after Congress allocated another $310 billion for the PPP, the loan size nationally has averaged $76,000.
“What that is telling me is we’re not going through the funds as fast, but we’re reaching more businesses,” SBA Regional Director Rob Scott said Tuesday in a media conference call. “Because they’re lower loan amounts, the money is going farther.”
The SBA has a little more than $130 billion left in the second round of the PPP, and Scott expects that to last another week.
In less than a week after resuming the PPP on April 27, the SBA in Michigan approved 60,373 loans totaling $5.56 billion for small businesses affected by the COVID-19 pandemic.
The second round volume comes on top of the 43,438 PPP loans for $10.38 billion that the SBA approved in Michigan during the first round of the program.
As of last Friday, the SBA has approved 103,811 PPP loans in Michigan for more than $15.94 billion between the two rounds.
In an email this week, Community Bankers of Michigan President and CEO Mike Tierney wrote that the second round of the PPP “has gone much smoother for our Michigan banks as there were no start-up problems with the SBA."
“Banks in Michigan were able to reach out to businesses that did not have a prior relationship with them this time around, so many more Michigan businesses were helped — especially small businesses,” Tierney wrote.
The National Federation of Independent Businesses said Tuesday that the PPP “is very popular among small businesses.” A survey indicates that 77 percent of NFIB members submitted a PPP application to the SBA and received a loan. More than 80 percent of the applications from NFIB members were submitted by April 16, the organization said.
About six in 10 NFIB members responding to the survey said they had received the money. A little more than half who are still waiting have been notified that their application was approved, according to the NFIB.
“The remaining small businesses that have not applied, or are in the process of applying, might be on the sideline for a variety of reasons. Such reasons may include lack of interest in a loan, do not believe they qualify, or cannot find a financial institution to submit their application,” according to a report from the NFIB on the survey results.
The loans are intended for small businesses owners to keep people on the payroll or call back workers who were laid off. If the borrower maintains their workforce for eight weeks, the SBA will forgive the debt.
“The goal is to keep folks on payroll,” Scott said.
Legislation that created the PPP does not require small businesses such as restaurants that were shut down or have been operating on a limited basis to fully reopen to receive funding or qualify for loan forgiveness, Scott said.
“They may not be able to be at full capacity and have all of these people in a restaurant that are dining out and in close proximity,” he said.
EDITOR’S NOTE: This story has been updated from its original version.