The Small Business Administration released information Monday about nearly 700,000 loans issued as part of the federal $660 billion Paycheck Protection Program since its launch in early April.
The disclosure includes the names of 660,000 small businesses and nonprofit organizations that received at least $150,000 in funding, the most detailed yet on one of the largest economic stimulus packages created by the federal government.
The data shows the government issued $521 billion in loans, with an average loan size of $107,000. Treasury and SBA officials say the program helped support around 51 million jobs, according to self-reported data provided by borrowers. They said that accounts for 84 percent of all employees working at small businesses, based on Census Bureau data.
About half the money went to employers in five industries. The health-care and social assistance industry received 12.9 percent of the money; 12.7 percent went to professional and technical services; 12.4 percent went to construction; 10.3 percent went to manufacturing; and 8.1 percent went to hotels, restaurants and other hospitality and food service employers.
So far, the data released includes information for only about 15 percent of all 4.9 million loans issued. After a series of contradictory statements by officials about what would be released, SBA withheld the names of borrowers for loans of $150,000 or less, which likely omits most sole proprietors and independent contractors.
The idea behind the program, part of the $2 trillion Cares Act economic stimulus legislation, was to quickly deliver money to workers at businesses with fewer than 500 employees in order to keep them connected to their jobs until the pandemic receded. Employers applied through their banks, which approved loans and sent them to the SBA for final approval.
Economists across the political spectrum have praised the program for quickly disbursing hundreds of billions of dollars to small business and their employees, which experts say probably drove down the unemployment rate from record highs.
But the program has also faced criticism for initially allowing hundreds of large, well-capitalized firms to receive funds as well as the changing and sometimes contradictory rules issued by the Treasury Department and the SBA. Publicly traded chains early on reaped millions, prompting more than $30 billion to be returned to the government after the administration condemned well-capitalized companies for taking funds.
Administration officials declined to speak on the record about the data.
“We think we’ve done a reasonably good job of suggesting that those who were not going to be able to meet the certification should have returned money,” said one senior administration official, speaking on the condition of anonymity in order to follow the administration’s rules for releasing the information.
Borrowing from the program has slowed to a trickle despite Congress and officials at the Treasury Department and the SBA repeatedly loosening the rules to allow more companies to receive funds and making it easier for borrowers to have the loans forgiven and turned into grants, as most are.
“We were really trying to verify the data and just clean it up. We wanted to make sure it was as accurate as possible,” said the senior administration official.
“We wanted to make sure everything was clear and organized,” said another senior administration official.
Congress passed legislation this week extending the deadline to apply to through Aug. 8 and are considering how best to repurpose money that is left over. About $130 billion remains in the program, and the administration plans to release more data about the program after that deadline.
Questions about when and how data would be released have dogged the program almost since its launch. The SBA has released the names of borrowers and the amount of their loans dating to 1991 for most recipients of the agency’s 7(a) loan program, on which PPP was fashioned. The agency also informed borrowers on the PPP application form that the names of borrowers would be “automatically released” to the public.
But the government’s failure to release information on the loans as they were issued prompted 11 news organization, including The Washington Post, to file a Freedom of Information Act lawsuit seeking business names and loan amounts for all PPP recipients. The SBA’s inspector general also found in May that the agency failed to prioritize minority- and female-owned businesses as Congress intended when they started implementing the Cares Act.
Government transparency advocates said the public should have access to detailed information about every loan provided with government funding.
“This data is a good start, but totally insufficient,” said Danielle Brian, executive director of the nonprofit Project on Government Oversight. “We are beginning to see some patterns of winners and losers in the program, but certainly not the details we need either to know if there’s corruption or if employment goals have actually been met.”
Numerous defense contractors and gun companies were among the recipients of loans totaling $2 million or more. They include Yulista Tactical, an Alaska-based company; Patriot Contract Services, a California-based company that helps manage and operate Navy ships among others; Close Quarters Tactical, a Michigan-based shooting range that offers professional training to military, law enforcement and others; Quantico Tactical, a Virginia-based defense contractor; and TYR Tactical, an Arizona-based defense contractor.
Juggernaut Tactical, an Arizona-based company that sells modified AR-15 assault rifles, and a North Carolina gun and ammunition distributor called Tactical Superstores both received loans between $150,000 and $350,000.
Some loan funds went to federal contractors closely involved in pandemic response. Federal Resources Supply Company, a contractor focused on emergency supplies whose federal sales topped $300 million last year, received a loan between $2 million and $5 million, according to the data released Monday.
The data lists 43 Planned Parenthood locations across the country that received a combined $60 million in loans. PPP loans to Planned Parenthood locations drew political fire in May, when 127 Republican lawmakers called for a federal investigation of the loans and 41 Democratic senators defended them.
The SBA sent letters to dozens of Planned Parenthood affiliates ordering them to give back the money but the data released Monday does not indicate whether any of the loans were returned. The SBA said the local chapters are too closely affiliated with Planned Parenthood’s national organization to be considered independent entities.
Each of Planned Parenthood’s state and local affiliates is a separate nonprofit, with its own leadership and funding organization.
Information about the loans to date is likely to aid policymakers as they consider how to craft the next phase of stimulus. Questions also remain about whether the taxpayer-backed loans reached the smallest businesses and those who felt the economic crisis most sharply, as the law required borrowers to show no evidence that they had been harmed by the pandemic.
A study by the National Bureau of Economic Research based on an earlier, limited data set found that the geographic distribution of loan funds did not correlate with parts of the business community that are most closely affected by the coronavirus.
Other businesses that received funds early on have had to furlough or lay off employees a second time as the rise in infections in the United States forces a new round of business closures.
The share of loan funds that went to low and moderate income areas almost exactly matched that group’s share of the population, according to a Treasury Department analysis. It is unclear, however, whether minority-owned business received a proportionate share of PPP loans. The limited demographic information that was collected for PPP loans was withheld from the data sets released Monday.
In May, a federal inspector general report concluded that SBA did not direct private lenders to prioritize minority- and female-owned businesses as Congress intended under the program. SBA Inspector General Hannibal “Mike” Ware found that the SBA failed to incorporate guidance on lending to businesses in underserved communities although he concluded what the SBA has “mostly” been aligned with the legislation.
Ideas from congressional leaders led by Sens. Marco Rubio (R-Fla.) and Ben Cardin (D-Md.) include directing more money to businesses that prove they were affected by the pandemic and better targeting businesses with fewer than 10 employees. Hotel or restaurant chains may also be legally prevented from receiving more than $2 million total.
