Which Industries Have The Most Approved Ppp Applications
Businesses that provide other services not including administration received the highest number of PPP loans so far in 2021 over 1.1 million. This was followed by businesses in the transportation and warehousing industry and those in the professional, scientific and technical services industry.
That services industries received the most funding should come as no surprise these were the hardest-hit by government shutdowns, and the SBA revised their loan amount formula to allow this industry to receive extra funding.
But several other industries received a higher number of PPP loans including construction and transportation. This is likely because the size of businesses in industries like food service are often smaller than, say, wholesale and transportation companies.
The smaller businesses are eligible for lower loan amounts due to size and compensation for wages is capped at the equivalent of a $100,000 annual salary per employee. Which means even very successful small businesses with well-paid employees top out at a lower amount than larger businesses.
Cares Act Fraud Tracker
On March 29, 2020, the Coronavirus Aid, Relief, and Economic Security Act was signed into law. It provided more than $2 trillion in economic relief to help Americans cope with the economic impact of the COVID-19 global pandemic. The Act originally authorized up to $349 billion in forgivable loans to small businesses through the Paycheck Protection Program , and Congress later authorized $321 billion in additional PPP funding. Additionally, the CARES Act has authorized other relief, such as the Economic Injury Disaster Loan , Economic Impact Payments , Provider Relief Fund , Pandemic Unemployment Assistance , and Federal Pandemic Unemployment Compensation . In the chart below, Arnold & Porter tracks criminal cases that the Department of Justice has brought to address CARES Act-related fraud.
Arnold & Porter represents borrowers, lenders, and other service providers in all manner of issues arising under the PPP and other CARES Act programs. Our team of former high-level government prosecutors and seasoned regulatory attorneys provides unparalleled insights and extensive experience in investigations, defense, regulatory and compliance matters involving the various CARES Act programs, including on matters before the Department of Justice, SBA-OIG, state attorneys general, OCC, FDIC, and Federal Reserve Board. If you have any compliance- or enforcement-related concerns, the contacts below are available to answer questions and provide guidance.
Allowable Use Of Loan Proceeds
PPP loan proceeds may generally be used for payroll costs. Payroll costs include gross salary and wages, tips, vacation leave, sick leave, holiday pay, furlough pay, bonuses, severance pay, and other compensation paid to employees, up to $46,154 per employee. Payroll costs also include the employer’s cost for health insurance benefits for its employees and retirement benefits for its employees, neither of which are counted against the $46,154 limit per employee. Employer-paid state taxes assessed on employee compensation, such as state unemployment tax, are allowable payroll costs.Emergency Paid Sick Leave and Emergency Family Medical Leave, the employer’s portion of social security and Medicare taxes, and federal unemployment tax must be excluded from payroll costs.
In the case of a sole proprietor, independent contractor, or self-employed person, allowable payroll costs include owner-compensation replacement, up to 15.38% of their net self-employment profit in 2019, up to a maximum of $20,833. Health insurance benefits and retirement benefits for an owner of the business are not allowable payroll costs.
PPP loan proceeds may also be used for certain non-payroll costs. Allowable non-payroll costs include business payments of mortgage interest, other interest, rent, and utilities, such as electricity, gas, water, telephone, internet, and transportation utility fees assessed by state and local governments.
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According to the SBA data, the gas drilling company was not only Bexar Countys largest PPP recipient, it was also the nations largest recipient in the oil and gas industry.
Lewis Energy Group has purchased more than 500,000 acres in the Eagle Ford Shale, and was once one of the most prolific drillers there.
#2 Bill Miller Bar-B-Q Enterprises Ltd.
Loans forgiven: $10,115,342.47
Reported jobs retained: 500
The PPP was intended for firms with fewer than 500 employees. However, exceptions were made for restaurants that employed no more than 500 employees per location, like Bill Miller.
According to forms it submitted to Bexar County as part of a request for tax relief, the chain employs 2,300 full-time employees and 3,000 part-time employees, with most based locally.
Bill Miller temporarily closed its dining rooms in June 2020 because of rising COVID cases. It did so again earlier this year due to staffing shortages.
#3 Buffets LLC
Loans forgiven: $10,113,972.60
Reported jobs retained: 500
This former national buffet empire once claimed 650 stores across multiple brands, but by 2021, it had filed for bankruptcy for the fourth time in a decade. Its restaurants in San Antonio included Furrs Fresh Buffet and Ryans Buffet. It has since renamed to Fresh Acquisitions and has been purchased by a holding company for $4.2 million.
#4 Muy Pizza Tejas LLC
Loans forgiven: $10,113,424.66
Reported jobs retained: 500
Loans forgiven: $9,215,401.24
Reported jobs retained: 500
Which States Got The Most Ppp Loans
California received the highest number of loans in 2021, with some 692,692 businesses funded by the PPP. Florida followed with 598,506 businesses that received PPP loans. Texas came in third with 559,159 businesses funded and Illinois pulled in fourth with 435,736 PPP loans.
While US territories are eligible for PPP funding, they consistently ranked at the bottom of the list. American Samoa received the fewest PPP loans, with only 37 businesses approved in 2021. Of the 50 US states, Vermont received the fewest loans so far in 2021.
Number of PPP loans by state/territory
That Texas, California, Florida and New York received the most funds and the highest number of loans is no surprise, given the size of their economies. And the East Coast is where the virus hit early and where many states were likely to have tighter stay-at-home orders throughout the outbreak.
Some notable exceptions are Florida and Georgia, which reopened their economies sooner than many states that received fewer PPP loans.
Most of the states that received the most funding are also home to large cities, where businesses have been hit particularly hard. The US territories, which received the fewest funds, have smaller populations and were affected by the virus differently than the contiguous US.
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Local Business Owners Describe Surviving Amid Plummeting Sales
According to the SBA data, the Church of Scientology New York the mission of Belleair in Largo, Florida and the founding Church of Scientology of Washington, D.C., each took loans for up to $350,000, supporting a total of 137 jobs. Nearly 100 of those were in New York, while almost 40 were in the Belleair facility. The D.C. organization self-reported zero jobs retained.
âLoans were received by a handful of individual Churches to assist them during the pandemic,â wrote Karin Pouw, spokesperson for the Church of Scientology International, who said the D.C. location “retained 100% of their staff.” None of the other entities responded to requests for comment.
Companies are not required to report how many jobs they retain to take the loans, but they must do so within 24 weeks to qualify for the loan to become a free grant. Nearly 50,000 other companies had zero jobs retained in the dataset.
“PPP was created to retain jobs,” SBA spokesman Jim Billimoria said in an email. “I can’t speculate on what borrowers used funds for.”
CORRECTION : A previous version of this article misstated the extent of PPP loans to the Church of Scientology. Individual Scientology churches and missions received loans, not the parent church.
Ben Popken is a senior business reporter for NBC News.
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Planned Parenthood Kushner Family Kanye West Receive Ppp Loans Intended For Small Businesses
Farrell this year rented out his 17,000-square-foot, $40 million East End estate, Sandcastle, for close to $2 million to a wealthy Manhattan family trying to escape the coronavirus for six months.
To legally qualify for the taxpayer-funded relief, businesses must self-certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant,” according to the borrower application form. Applicants must also check a box that says the loan will be used to retain workers, maintain payroll and make mortgage interest, lease and utility payments.
The emergency payroll relief effort reached over 80 percent of all small-business employees and 27 percent of low- and moderate-income communities, according to the SBA.
In April, after the initial round of funding swiftly ran out, fierce battles broke out over which companies received the loans and whether they deserved to, by either the letter or the spirit of the CARES Act, which created the program.
Hundreds of public companies and an unknown number of private companies ended up canceling their loans and giving the money back. But others held on, including some operating in high-net-worth orbits.
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The fine art studio of Koons, known for sculpting metal balloon animals that fetch tens of millions of dollars at auction, got a loan for up to $2 million, supporting 53 jobs.
Loans Made To Publicly Traded Companies
On April 23, the Small Business Administration released guidance stating that it is unlikely that a publicly traded business with substantial and access to capital markets would be eligible for a PPP loan. Such a business would not be able to certify in good faith that the PPP loan is necessary to support its ongoing operations because of the current economic uncertainty. While a lender does not need to require a business to demonstrate the basis in its certification, the Small Business Administration may do so. The Small Business Administration said it would not pursue action against any such business that applied for a PPP loan prior to April 23 and repays the loan proceeds by May 7, later extended to May 14 and then extended again to May 18. On April 28, the guidance was extended to businesses owned by private companies with similar situations.
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Jobs Retained: At Least 3035
Dallas-based Rowlings TRT Holdings acquired the Omni Hotel chain for $500 million in 1996 after selling the family oil business. Hes since built it into a multi-billion-dollar operation, with 60 hotels across the country and more under construction. According to the SBA data, 13 Omni hotels received loans mostly in the $2 million to $5 million range each, for a total of between $27 million and $64 million. Those include brand new hotels in Louisville, Kentucky and Boston as well as the Omni Berkshire in midtown Manhattan. Five branches of his TRT Development company – in five cities in Texas got loans of mostly $1 million to $2 million each. Another Rowling-owned company, the Golds Gym chain, went through a prepackaged Chapter 11 restructuring in May. An Omni spokesperson did not immediately respond to request for comment.
Who Got It And How Did It Affect Them
The Paycheck Protection Program , enacted as part of the Coronavirus Aid, Relief, and Economic Security Act , provided small businesses with approximately $800 billion in low-interest uncollateralized loans from April 3, 2020, through May 31, 2021.
Research and analysis conducted by the National Bureau of Economic Research estimate that the program preserved 2 to 3 million job-years of employment at a cost of $170,000 to $257,000 per retained job-year.
A job-year is defined as one job for one year.
Almost all PPP loans are expected to be forgiven with 94% of eligible small businesses in the U.S. receiving one or more loans under the program. Roughly 25% of PPP loan funds went directly to workers who would have lost their jobs. The rest went to business owners, shareholders, creditors, and suppliers of companies receiving loans.
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Ppp Extension Act Of 2021
On March 11, 2021, the bill, H.R. 1799 PPP Extension Act of 2021, was introduced in House of Representatives during the 117th Congress. The bill extends the covered period of the Paycheck Protection Program from March 31, 2021, to June 30, 2021, by amending the Small Business Act and CARES Act. It passed the House on March 16, 2021, in a bipartisan vote . It passed the Senate on March 25, 2021, in an also bipartisan vote . The following day on March 26, it was signed into law by President Joe Biden.
Consolidated Appropriations Act 2021
On December 21, 2020, the House and the Senate passed the Consolidated Appropriations Act, 2021, which includes $284 billion in forgivable loans to small businesses via the Paycheck Protection Program.
The Act restarted the period to apply for PPP loans, added $284.5 billion in funding for PPP loans, and it allowed certain entities to apply for a second draw of a PPP loan. The Act also opened eligibility to certain 501nonprofit organizations.
The Act stated that entities that received a PPP loan of less than $150,000, rather than $50,000, would be eligible to use a simplified one-page loan forgiveness application.
The Act expanded the definition of allowable payroll costs to employer-sponsored group life insurance benefits, group disability insurance benefits, group vision insurance benefits, and group dental insurance benefits.
Loans Made To Politicians And Their Families
Some PPP loans were received by businesses owned or run by members of Congress or their spouses. On June 16, Politico reported that this included Reps. Susie Lee ” rel=”nofollow”> DâNV), Debbie Mucarsel-Powell ” rel=”nofollow”> DâFL), Roger Williams ” rel=”nofollow”> RâTX), and Vicky Hartzler ” rel=”nofollow”> RâMO). Three weeks prior, Dean Phillips ” rel=”nofollow”> DâMN) had introduced legislation to require public release of the name of many of the recipients of PPP loans, but enough Republicans voted against it that the bill did not pass. Lee and Muarsel-Powell had voted in favor of public disclosures while Williams and Hartzler had voted against public disclosures. Ordinarily, an application for a Small Business Administration by a business owned or run by a member of Congress or their immediate family must be reviewed by the Standards of Conduct Commissions before the loan may be approved, but the Small Business Administration had waived that requirement for all PPP loans on April 13.
Rep. Ayanna Pressley reported receiving PPP loans in her 2020 Financial Disclosure Report.
The parents of White House Press Secretary Kayleigh McEnany received $1â2 million for their business, McEnany Roofing, which has 141 employees. The press secretary told Fox News in April 2020 that most loans had gone to “companies with 10 or fewer employees. That is what this program is designed to do, that is who it is helping.â
Update: 102 Million Ppp Loans Were Forgiven Here’s Why
More than 11.5 million Paycheck Protection Program loans were issued as of July 4, 2022, with 707 borrowers receiving the maximum loan amount of $10 million.
Of the total number of loans, 10.2 million have been partially or fully forgiven. The average dollar amount forgiven was $72,500. Of the borrowers receiving the maximum amount, 625 loans have been partially or fully forgiven.
In some instances, you may see on the Paycheck Protection Program Interactive Dashboard that the forgiven loan amount is more than the original loan. The reason is that the interest on the loan has been forgiven as well.
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Jobs Saved And Doors Kept Open
On the other hand, PPP had a measurable and significant positive impact on pandemic job losses, saving somewhere between 2 and 3 million job-years, albeit at a substantial cost. With jobs saved and workers on the job, it would also make sense that employers would be able to stay open. NBER found this was true for small employers especially. What is less certain is the degree to which small employers would have shuttered their doors permanently versus on a temporary basis. The data, NBER said, offer stronger support for PPP helping small companies avoid temporary closure than for preventing them from shutting their doors forever.
For companies with around 500 employees, there was no consistent evidence that PPP funds influenced temporary or permanent shutdowns. Despite saving jobs during the pandemic, PPP may not have had a significant impact on the preservation of intangible business capital, according to NBER.
Senate Majority Leader Mitch Mcconnell
Foremost Maritime Co. is a company run by the sister of U.S. Secretary of Transportation Elaine Chao, who is married to Senate Majority Leader Mitch McConnell. Foremost Maritime received a PPP loan between $350,000 and $1 million. However, McConnell said that neither he nor his wife are involved in Foremost Maritime and were not aware of the PPP loan.
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