In late-April, the federal government acted to replenish the Paycheck Protection Program (PPP) after SBA lenders exhausted the program’s $349 billion in funds in less than 14 day. Congress and the Administration infused PPP with $310 billion in additional funds, and SBA lenders began making loans from the second tranche on April 27th.
Source: U.S. Small Business Administration
As of May 8th, $188.9 billion of the $310 billion made available to banks through the PPP had been lent to small businesses. 2.5 million loans had been made by 5,463 lenders, with the overall average loan size being $73,000 (down from the $206,000 average in the first round). Interestingly, demand for PPP loans appears to be slowing as roughly 40 percent of the program’s funds were available 12 days after the second round launched, while nearly 100 percent of the funds were tapped at the same time in the first round. A recent Wall Street Journal article speculates that the biggest reason for the decline in demand is that small business owners have concluded that either PPP doesn’t meet their needs, or they are waiting for additional Treasury guidance on the terms under which loans can be forgiven.
Despite the dip in demand, small businesses do appear to be receiving the help that they need. Research from the American Bankers Association indicates that nearly half of all small businesses in each state have received PPP loans. ABA research would seem to square with the results from a recent survey conducted by the National Federation of Independent Businesses, which found that 61 percent of PPP loan applicants had received their loan, up from 20 percent on April 16th. Of the 39 percent of NFIB survey respondents who hadn’t received their loan, 45 percent have received notice that their loan application was approved.