During the July 4 weekend, President Donald Trump signed a legislation extending the application deadline for the Paycheck Protection Program (PPP) through August 8. The small business loan program expired on June 30, having awarded $531.5 billion in loans, according to a PPP Report from the Small Business Administration. Prior to the extension of the PPP deadline, the program still had $131 billion in unused funds.
According to the latest PPP Report from the Small Business Administration, which tracks approvals of loans through June 30, 86.5% of PPP loans were for less than $150,000 with an average loan size of $107,000. Two-thirds of the loans through the PPP to small businesses were worth less than $50,000. The construction industry received $64.6 billion in loan approvals across 466,221 applications for an average of $138,560 per loan. Only the healthcare and social assistance industry (506,263 applications; $67.4 billion in loans) and the professional, scientific, and technical services industry (638,221 applications; $66.4 billion in loans) received more federal money from the PPP than the construction industry.
A previous PPP Report issued on April 13 indicated the construction industry led all other subsectors with $40 billion in loan approvals at an average of $296,000. In the month and a half between the first and second report, 351,383 new construction subsector loan applications were processed by the SBA, with an average loan of about $70,000.
Under the PPP, small businesses—companies with 500 employees or fewer—can apply for partially forgivable loans that can cover operating expenses. The PPP was originally allocated $349 billion as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, but funding ran out within two weeks. The government approved $310 billion in additional funding for the PPP and recently clarified that small businesses can qualify for partial loan forgiveness even if 60% of the PPP loan was directed towards payroll costs during the loan forgiveness covered period. The covered period for loan forgiveness was also extended from eight weeks after the date of loan disbursement to 24 weeks.
