A Quarter Of PPP Funding Went To Real Estate, Retail And Construction
Before the $350B Paycheck Protection Program ran out of money on Thursday, real estate, retail and construction businesses together received roughly $63.1B, or just over a quarter of the total amount distributed.
The construction industry, which is weathering mandated shutdowns in some places, had the largest chunk of PPP money of any industry as of Monday, the latest day for which data is available.
Over 114,000 loans totaling almost $34B were approved for construction companies, or 13.73% of all PPP funding, the Small Business Administration reports.
Retailers obtained $21.2B, or about 8.57% of the total, while real estate-related companies got $7.9B, or 3.22% of the total. The three sectors combined received 25.1% of available PPP money before the program's payouts ceased due to lack of funds.
Beyond those three, the accommodation and food services sector, which includes hotels and restaurants, received $22.7B, or 11.2% of the total. Transportation and warehousing businesses got $7.8B, or 3.1% of the total. The SBA uses the North American Industry Classification System to define businesses.
The Coronavirus Aid, Relief and Economic Security Act, which was signed into law late last month, created the PPP as a way to provide businesses immediate cash infusions to pay employees rather than firing them. They are also allowed to use the money for other urgent expenses, such as paying their rent or mortgage.
The money is structured as an SBA loan made by authorized financial institutions, but businesses can apply for loan forgiveness. Employers that lay off employees or reduce wages by more than 25% have that forgiven amount reduced.
An interim SBA rule issued shortly after the law passed suggested that smaller construction companies and homebuilders would not be eligible for PPP loans. The agency then revised the rule to allow all construction companies with fewer than 500 workers access to PPP. Whether homebuilders could participate is less clear.
As of Monday, the SBA has overseen more than 1 million PPP loans through 4,664 lenders. The majority of the loans (70%) were for less than $150K, totaling $37.1B. About 15% of the loans were for between $150K and $350K, totaling $35.7B.
Disagreements on Capitol Hill have prevented more money from being put into the PPP. Senate Republicans have proposed putting another $250B in the program, while House Democrats have insisted that another $250B for hospitals and state and local governments be part of any package. Each side has thus far blocked the other's proposals, The Hill reports.