Paycheck Protection Program Data Dive by Region

On March 27, 2020, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which authorized the Paycheck Protection Program (PPP) designed to help businesses dealing with the effects of the SARS-CoV-2 virus and incidence of COVID-19. Banks have worked nearly around the clock since the PPP was announced to help their communities access the funds.

On April 16, 2020, the U.S. Small Business Administration (SBA) announced that loans had maxed out the $339 billion allotted for the fund, which excludes the $10 billion allotted for fees and processing. The SBA is expected to begin taking PPP loan applications again next week after Congress passed a $484 billion relief package, which included $310 billion to replenish the PPP fund.

Since the passage of the CARES Act, the SBA has provided high-level information regarding the PPP, including approved loans and approved dollars broken out by state and loan approvals by loan size. BKD has reviewed this data and combined it with other data sources for a more in-depth look at the PPP across the country.

The SBA defines a small business as employing fewer than 500 employees. According to the SBA, approximately 30.7 million businesses meet that definition in the United States. Of those small businesses, approximately 5.4 percent, or 1.6 million, received approval in the initial round of funding. This number is somewhat lower than 5.4 percent of total small businesses, as the total applications also includes national hotel and restaurant chains, which were allowed to participate in the PPP under the CARES Act.

Many of the largest states saw fewer small businesses approved for the PPP than the 5.4 percent average, with California ranking lowest with only 2.8 percent of a total estimated 4 million small businesses receiving PPP approval. Arizona, Florida, New York and New Jersey were other large states that fell below 4 percent of small businesses receiving approval. Meanwhile, many Midwest states saw PPP approvals well above the 5.4 percent average, with North Dakota coming in at 15 percent of the state’s total estimated 73,000 small businesses receiving PPP approval.

By region, the Midwest ranked first with 7.5 percent of 6.3 million small businesses approved for funding, with 470,649 approved loans and $91.5 billion approved. While the impact of community banks on the PPP is difficult to determine based on the SBA’s data released to date, it’s worth noting that the Midwest ranks first among the regions with 2,448 institutions and 24,503 branches. Per capita, the Midwest ranks lowest among the regions with an average of approximately 3,000 people per branch and approximately 30,000 people per institution.

On the other end of the spectrum, the West ranked last with 3.8 percent of 6.4 million small businesses approved for funding, with 241,170 approved loans and $58.2 billion approved. Per capita, the West ranked highest among the regions with an average of approximately 5,500 people per branch and approximately 202,000 people per institution. These numbers could point toward the significant success that community banks had with getting the PPP to small businesses across the country, while some larger financial institutions faced challenges in getting the PPP off the ground and serving small businesses.

Note: Due to a lack of data on small businesses in U.S. territories, the commonwealth of Puerto Rico, U.S. Virgin Islands, Guam and American Samoa were excluded from this analysis. Source: S&P Global Market Intelligence, SBA and Federal Deposit Insurance Corporation.

BKD will continue to follow this developing situation. As with most topics related to COVID-19, changes are being made rapidly. Please note that this information is current as of the date of publication. Visit BKD’s COVID-19 Resource Center to learn more.

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