Rohit Arora Senior Contributor
Small Business Strategy
I write about small business lending and growth.
We knew it wouldn’t last forever, but the speed at which the CARES Act’s Paycheck Protection Program (PPP) funding dried up is stunning.
The $350 billion funding pool established for small businesses struggling to meet their bills because of the coronavirus, ran out of money in less than two weeks, and politicians in Washington are battling over the next round of funding and how much it will be.
According to the Small Business Administration (SBA), more than 1.62 million applications were approved by about 5,000 lending partners. Just how much of that money is already in the bank accounts of small business owners is yet to be determined.
Small business owners are not only competing against their peers, they also are competing against corporations, such as Ruth Chris Steakhouse, a corporation with 5,000 employees that reported revenues of $135 million in the fourth quarter of 2019. Ruth Chris obtained $20 million in PPP funding, according to a report in the Wall Street Journal. Earlier, the newspaper reported that most of the government-backed loans approved have been for amounts less than $350,000, while approximately 5% are for amounts greater than $1 million, according to SBA figures.
COVID LoanTracker.com, a website established by group of small business owners concerned about the timeline for receiving loans from the government, found through its online survey that only 574 of the 10,500 businesses (about 5.5%) that applied for PPP loans have received them. Additionally, only 546 of 9,729 applications – a less than 6% success rate – have obtained SBA Economic Injury Disaster Loan (EIDL) money related to the coronavirus pandemic so far.
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