What You Need to Know
- More than half of respondents to a LendingTree survey said PPP loans helped big businesses to the detriment of smaller ones.
- Many small-business owners reported trouble with the PPP loan application process.
- The Biden administration has announced changes to make the program more equitable.
More than half of small-business owners in the U.S. do not think that Paycheck Protection Program funds have gone to the hardest-hit businesses, according to a survey by LendingTree.
PPP provides loans to help businesses keep their workforce employed during the pandemic, but the program’s rollout has been widely criticized. Initial funds provided by the CARES Act ran out within two weeks, and a second round of funding expired in August.
In that first round, many multimillion-dollar corporations took advantage of the program, while many small-business owners were unable to get aid.
The Consolidated Appropriations Act, 2021, signed into law Dec. 27, includes new funding for the PPP. However, many small-business owners who applied for loans this year said they had issues with the process, according to LendingTree.
On Feb. 22, the Biden administration announced that businesses with fewer than 20 employees would get exclusive access to PPP funds between Feb. 24 and March 9. It also laid out other changes in the program to make access to PPP loans more equitable.
LendingTree’s survey was completed before the administration’s announcement. The firm said many small-business owners who had participated would likely be cheered by the announced changes, based on their responses.
LendingTree conducted the online survey between Jan. 22 and Feb. 1 among 587 participants who had previously applied for funding through LendingTree’s small-business lending database.
Fifty-four percent of survey respondents said PPP funds helped bigger businesses at the expense of those struggling to survive. Twenty-nine percent were somewhat less critical, saying the funds were going to those who need the money — while also helping plenty of businesses that do not.
Messy PPP Application Process
Nearly 40% of surveyed small-business owners have applied for funding through the most recent PPP funding round. Fifty-three percent of those who had no plans to apply said their main reason was not meeting the eligibility criteria.
Of those who applied for funding in this latest round, only 9% were approved for 2021 PPP funding. Sixty-seven percent said they were still waiting to hear back.