Based on the limited data available since the second round of the U.S. Paycheck Protection Program started, it seems a larger number of small loans have been approved than during the first round — and they are reaching a wider range of businesses, instead of being concentrated in only a few states, according to a new S&P Global report released Tuesday.
However, a glaring flaw in the U.S. Small Business Administration’s program remains: “At this point in time the bulk of the programs seem to lean toward benefiting states with fewer jobless claims,” said the report, “The Paycheck Protection Program Impact On Jobs: (More) Help Wanted” by S&P Global U.S. Chief Economist Beth Ann Bovino.
“And based on small business surveys, it’s apparent that more help is wanted (and needed),” the report said. SBA didn’t immediately respond to a request for comment Wednesday.
Although it was “well-intentioned,” the first PPP round “appears to have missed the mark, in terms of geography, industries served, and size to meet significant small business demand,” the report said.
S&P Global found that 63% of 1.6 million first-round PPP loans (with an average loan size of $206,000) went to industries less impacted by social distancing, including good-producing industries, which received 27% of loans with 2.3 million lost jobs, according to the report.
In comparison, information services and financial industries received 36% of loans with 5.3 million lost jobs, and service industries received 35% of loans while accounting for 12.9 million lost jobs (62.9%) in the first round, the report said.