Dive Brief:
- Construction firms received $13.7 billion in loans under the latest version of the Paycheck Protection Program, making the industry second in total loan amounts received after restaurants and hotels, which got $18 billion in funds so far.
- Small Business Administration data released last week shows that loans to construction firms made up 14% of all funds paid as of Feb. 7. Construction was also one of the top industries to receive funds in last year's two PPP rounds.
- Top lenders for this year's PPP program were JPMorgan Chase Bank, Bank of America and Itria Ventures, the SBA said.
Dive Insight:
The new SBA data provides a snapshot of the types of businesses that received loans this year and the sizes of the loans. The average loan across all industries was $78,000, and about 70% were for less than $50,000.
About three-quarters of the companies taking money in this round, which began in mid-January, also received PPP funds last year, the data shows. So far, about $104 billion has been lent to more than 1.3 million businesses in the 2021 program, which has a total of $284 billion in funds. The PPP has aided companies struggling with COVID-19 challenges by providing forgivable, SBA-backed loans to help them retain their employees.
So-called "second draw" PPP loans can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020 and certain supplier costs and expenses for operations, according to the SBA.
Also last week, the SBA said that it’s working to increase access for the smallest businesses on a more equitable basis and to provide more rapid, efficient distribution of funds. It said it will take additional steps toward improving the speed to resolve data mismatches and eligibility concerns so that small businesses have as much time as possible to access much needed PPP funds, while maintaining the integrity of the program.
The changes will:
- Enable lenders to directly certify eligibility of borrowers for First Draw and Second Draw PPP loan applications with validation errors to ensure businesses who need funds and are eligible receive them as quickly as possible.
- Allow lenders to upload supporting documentation of borrowers with validation errors during the forgiveness process.
- Create additional communication channels with lenders to assure we are constantly improving equity, speed, and integrity of the program, including an immediate national lender call to brief them on the Platform’s added capabilities.
The program changes program came after complaints earlier this month from the American Institute of Certified Public Accountants about problems with the SBA’s online system for processing the loans, which have produced error codes in response to validation checks in the system.
The AICPA said in a letter to the SBA that it wants clearer guidance to reduce confusion, along with better communication about the available funding, overall processing and timing of the program.
