May 6, 2020

UPDATE: Paycheck Protection Program

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I would like to provide an update on the Paycheck Protection Program (PPP) from the data I received this morning from the Connecticut Bankers Association.

Nationwide as of 5 p.m. yesterday, May 5 2020, a total of $2.38 million in PPP loans have been approved in the second round of funding for a total of $181.2 billion. That’s about 57% of the round-two funding used, leaving about $139 billion left.

Of that total:

53% were made by lenders with over $50 billion in assets
15% by lenders with $10-50 billion in assets
32% by lenders with under $10 billion

The average loan size for round two was $76,179

5,432 total lenders are offering PPP and they now include banks, Credit Unions, non-banks including Community Development Financial Institutions Funds (CDFI), Community Development Corporations (CDC), Microlenders, Farm Credit Lenders and FinTechs.

Average loan size for both round one and two was $129k which dropped from $206k, which means that smaller businesses have been receiving a large percentage of the dollars.

The most recent CT specific data available for round two, available as of Friday, May 1, 2020 at 5 p.m. shows:

Round two – CT – 29,559 loans and $2,556,813,94 approved. This is in comparison to the first round numbers below and shows a 60% increase in the number of CT small businesses receiving loans – good news.

Round one – CT – 18,435 loans and $4,151,934,451 dollars approved.

‌On a separate note for larger firms that accessed the PPP:

The SBA also announced yesterday that it will grant a seven-day extension to the safe harbor for firms that have access to other sources of capital to repay PPP loans. This is commonly referred to as the “shake shack provision” that changed the original rules of the program that allowed larger borrowers to access the program. In short, it means that this type of PPP borrower that applied for a loan prior to April 24, 2020 (that’s when the restrictive guidance came out) and repays the loan in full by May 14, 2020, will be deemed by SBA to have made the required certification of economic need in good faith. SBA said that the extension will be automatic.

Generally, the usage of the PPP program has slowed dramatically, perhaps due to shifting guidance, or concerns about negative publicity of using the program, or those most in need have already applied.

The good news is that businesses that need the PPP program can still access the program.

Please feel free to reach out to me at tom.delnicki@housegop.ct.gov if you have any questions or concerns about this information or other matters pertaining to state government.