HOUSTON – The most comprehensive picture to date of the federal program designed to keep businesses afloat during the coronavirus pandemic was revealed this week, but some details about the paycheck protection program remain unknown eight months after its launch implemented, and most of the money has already been dispersed.
The Small Business Administration, which was in charge of the loan program, revealed this week that about 411,000 loans have been approved for Texas businesses. Of these, over 98% were worth $ 1 million or less.
In total, Texas companies have received more than $ 41 billion in loans, including $ 13.8 billion to approximately 6,200 beneficiaries who have received more than $ 1 million each. These 6,200 companies represented about 1.5% of the total beneficiaries, but they received about a third of the dollars.
Texas companies backed by the $ 41 billion in loans said to retain 4.3 million workers. This does not include about 60,000 businesses that said they did not keep any jobs or did not indicate how many jobs they kept. This could be due to inconsistent data reports and also because borrowers weren’t required to report how many jobs they would keep, like the Chicago Tribune found.
In Texas, for example, four companies that received loans worth $ 10 million said they didn’t keep any jobs or didn’t say anything.
The data was released this week under an order from U.S. District Judge James E. Boasberg in Washington, DC, denying the SBA’s request to keep the information secret. This was the program’s most revealing disclosure since July, when the Trump administration published names of 51,250 Texan companies who received loans.
Data released in July was incomplete, but it showed the extent of the power of the program: Businesses and nonprofits from all walks of life were supported, from summer camps to country clubs to churches. and Texas-based brands like Billy Bob’s Texas of Fort Worth and Lucchese Boots of El Paso.
The idea of the leaders of Congress and the Trump administration was that the program would be better for the economy to keep companies employing workers than to overwhelm the UI program. Another goal was to prevent companies from collapsing completely, which would further delay a future economic recovery.
Congress rushed through it at the start of the pandemic as businesses across the country were forced to shut down, threatening millions of jobs. Small businesses and nonprofits have been allowed to apply for loans of up to $ 10 million to make up for lost business in order to pay their employees.
It was part of the $ 2.2 trillion coronavirus aid, relief and economic stimulus act, the only major coronavirus aid congress to pass.
As the end of the year approaches and businesses are struggling again as the pandemic escalates through Texas and the country, most of the loan money from the spring financial safety net legislation has already come out, according to a November report. survey by the National Federation of Independent Businesses.
According to research, 90% of borrowers have spent their loan money and want to apply for new forgivable loans. One in five small business owners responded to the survey saying that if economic conditions don’t improve, they will be forced to close their doors.
Despite repeated attempts to pass a new round of economic aid, Congress and President Donald Trump have failed to pass a new deal. Negotiators in Congress and the Trump administration are frantically trying to pass a new bill before the holidays. The main sticking points are how much to spend on packaging and liability protection to offer businesses during the pandemic.
The largest cities in Texas have the most businesses and therefore received the most loans. The SBA has granted more than 56,000 loans worth at least $ 6.9 billion to Houston companies, by far the largest tally of any city in Texas.
The SBA has also sent more than 27,000 loans worth at least $ 3.7 billion to businesses in Dallas; over 23,000 loans worth at least $ 2.7 billion to Austin businesses; more than 20,000 loans worth at least $ 2.3 billion to businesses in San Antonio; and over 11,000 loans worth at least $ 1.4 billion to Fort Worth businesses.
While the new data provides a more complete picture of the loan program, there are still many unknowns. Demographic details are still unclear, as many borrowers left blanks for gender, race, and ethnicity when applying for the program.
Disclosure: The Texas Tribune, as a local nonprofit and small business newsroom, applied for and received a Paycheck Protection Program loan in the amount of $ 1,116,626.