There was more than $132 billion unclaimed on loan approvals on the $659 billion Paycheck Protection Program (PPP) for small businesses bashed by COVID-19 through July 10, U.S. Small Business Administration data shows. The SBA runs PPP in conjunction with the U.S. Treasury.
At the same time, a new report shows most lenders and borrowers did not make known the race or ethnicity of the businesses applying for and receiving the loans.
Loan information released in early July, reportedly due to congressional pressure, shows little detail on how much of the federal loans went to minority-owned businesses, which were among those trounced the most by the coronavirus pandemic.
Around 86% of the 661,218 loans made for $150,000 or greater don’t provide any data about race or ethnicity of the business owner. The remaining 14% of loans reveals that more than 83% were to organizations identified as white-owned businesses, an analysis by the Center for Public Integrity indicated.
Black-owned businesses received fewer than 2% of the loans, while Hispanic-owned businesses got 6.6% of the loans. A nonprofit investigative journalism organization, the Center for Public Integrity reported it got a PPP loan. The loan amount was not disclosed.
Responding to the Center for Public Integrity analysis and providing Black Enterprise an SBA statement on PPP and demographics, spokesperson Carol Wilkerson says PPP loan data reflects the information borrowers provided to their lenders in applying for PPP loans.
She added SBA can make no representations about the accuracy or completeness of any information that borrowers provided to their lenders. Not all borrowers provided all information. For example, approximately 75% of PPP loans did not include any demographic information because that information was not provided by the borrowers.
Wilkerson says the SBA is working to collect more demographic information from borrowers to better understand which small businesses are benefiting from PPP loans. She added the loan forgiveness application expressly requests demographic information for borrowers, however, that information is requested on a voluntary basis.
Since being launched in early April in two rounds, the SBA has approved more than $517 billion in funding covering over 4.9 million loans. The latest average overall loan size was $105,000. The PPP loan application deadline was extended until August 8 from June 30, giving small businesses extra time to apply.
Some 3,558 banks with less than $1 billion in assets have provided over 1 million loans totaling over $84.4 billion since PPP started, SBA data shows. Several firms on the BE 100s Banks list are in that category.
In mid June, the SBA launched an online tool for small businesses and nonprofits to be matched with community development financial institutions (CDFIs), minority depository institutions (MDIs), certified development companies (CDCs), Farm Credit system lenders, microlenders, as well as traditional smaller asset size lenders in the PPP.
The SBA’s Lender Match is an extra resource for pandemic-affected small businesses who have not applied for or received an approved PPP loan to connect with lenders.