PPP round two running more smoothly for small businesses

PPP round two running more smoothly for small businesses

The CARES Act provided $2.2 trillion in emergency funding, with almost $350 billion in relief loans to small businesses, but the controversy around the program has prompted high-profile recipients to return loans.

More Flexibility and Technical Support - Requiring longer time limits for businesses looking to rehire employees, around repayment and forgiveness requirements to businesses that allocate a smaller amount of revenue to salaries, and expanding qualifications for loan forgiveness, in addition to providing the SBA with greater funding to improve technical support and mandate a uniform, user-friendly process for lenders.

The report shows there's no statistical significance between the severity of the economic impact of COVID-19, measured both in terms of cases and unemployment claims, and the share of small businesses getting PPP loans, after excluding NY and New Jersey.

"Michigan is home to a multitude of small businesses that are more than deserving of receiving assistance from the Paycheck Protection Program, but many of them were turned away when the first and second rounds of funding quickly ran out", said Nessel.

Following outrage over larger publicly traded companies getting PPP loans, the SBA has tried to ensure more loans are getting to the smallest firms, even reserving eight hours for only the smallest of lenders to submit applications on April 29.

Last week the second round averaged about $35 billion in loans processed from about 442,000 applications per weekday, similar to what happened last month with the initial tranche.

Emergency loans issued by the Small Business Administration have been more concentrated in areas with pre-existing bank relationships than those most affected by the coronavirus pandemic, economists at the Federal Reserve Bank of NY said in a Wednesday blog post. Not everyone's buying the latter part - legal experts say the government would have to prove that companies understood what it was asking in the application process, which many companies say wasn't clear.

Small lenders tended to grant smaller loans, according to the data. U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza said last week that the agencies will review all loans of over $2 million, as well as others that are deemed fit for review, in order to make sure borrowers were eligible to receive them.

Of the 378 loans totaling $1.2 billion received by public companies as of mid-afternoon Friday, 47 worth $350.4 million have been returned, according to data compiled by FactSquared.

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