PROVIDENCE – Fewer dollars flowed to Rhode Island small businesses in the last week of the Paycheck Protection Program compared to prior weeks, according to the latest update from the U.S. Small Business Administration published on Tuesday.
The $717.6 million in forgivable payroll loans approved in the second round of the program for Rhode Island businesses and other eligible entities like nonprofits as of March 7 represents a $25 million increase over the prior week. By comparison, previous weeks brought more than $50 million to state recipients.
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The number of newly approved recipients has also slowed in the last week. Of the 8,500 recipients in total, roughly 500 were approved for loans in the last week, versus 700-plus gains in recipients in weeks prior.
Nationally, the second round of the program has doled out $165 billion across 2.4 million loans as of March 7.
Whether the slowdown in dollars and recipients is a result of temporary restrictions that limit the program to the smallest of businesses, or simply a decline in demand, is unclear. Tomorrow, March 10, ends the two-week limit imposed by the Biden administration in which only businesses with 20 or fewer employees could apply for funds. The limits were intended to help small businesses, sole proprietors and minority business owners who critics feared were still being left out of the program.
According to a separate report published on March 5 by the SBA, the program is “on pace” to surpass specific goals related to helping the smallest businesses, those in low-to-moderate income communities and with loans granted through non-traditional lenders such as community development financial institutions.
The report also characterized the program as “successfully reaching smaller borrowers,” with 92% of loans, by number, awarded to businesses with 20 or fewer employees. In terms of dollars approved, 48% of funds have gone to businesses in this size range.
These percentages are identical to a prior update published on Feb. 25, suggesting that additional dollars allocated in the last week went to small businesses at the same rate.
Exactly how much the program is helping minority-owned businesses remains unclear due to lack of demographic data on recipients, a majority of whom did not identify their race or ethnicity. Roughly three-quarters of loans approved as of March 5 went to recipients who did not specify their race. Among those who did answer, white business owners have claimed about 15% dollars and number of loans, versus the 5.5% of loans that went to Black recipients. Hispanic and Latino recipients, which are categorized as an ethnicity separate from race, received 3.6% of loans, compared to the 29% that went to non-Hispanic or Latino recipients. Again, a majority, 67%, did not identify their ethnicity.
While the program has reached all 50 states, certain states have benefited disproportionately relative to their population of eligible small businesses based on U.S. Census Bureau data. In California, for example, 13% of businesses with 500 or fewer employees received loans, while about 8% of eligible recipients benefited in New York and Texas, respectively. A majority of states, including Rhode Island, reported less than half a percent of eligible small businesses receiving funds.
Just over $119 billion of the $284 billion allocation approved in the December stimulus bill remains available, with a March 31 application deadline.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
