Texas and California granted most small business bailout money so far
Small businesses based in Texas, California and within the construction sector are so far getting the biggest chunk of money set aside for struggling small firms, according to documents released by the Small Business Administration on Tuesday.
Why it matters: It's the agency's first — though limited — public breakdown of which small businesses are benefiting from the Paycheck Protection Program, the cornerstone of the coronavirus federal aid package meant to shore up small companies reeling from the pandemic's economic shutdown.
By the numbers: Over 88,000 Texas-based businesses got approved for loans worth $22 billion, while 54,000 California-based businesses are set to be awarded a total of $21 billion. The states are the top two contributors to total U.S. economic output.
- Florida, Illinois, New York and Ohio are next in terms of states with the highest number of loan approvals and total value of loans.
Of note: The SBA hasn't provided data on how many total applications have been submitted or how many businesses have been denied these loans.
The construction industry received the biggest share of all loan money approved so far: about 13%, or $34 billion.
- It also seen the second highest number of loans approved, behind the "professional, scientific, and technical services" category.
Background: The Paycheck Protection Program has faced backlash from cash-strapped small business owners who haven't been able to secure the loans.
- A big appeal is these loans won't have to be paid back if the money is used to pay staff, among other things.
- That should incentivize small businesses to keep their workers, bolstering America's workforce which has seen about 17 million workers file for unemployment in recent weeks.
Between the lines: While it's the biggest beneficiary so far, the construction sector is the fourth biggest small business employer, according to the SBA's latest small business report, which cites 2016 data.
- Health care, hotels and restaurants are the top small business employers, but the number of loan approvals in those industries are lagging.
More than 1 million loans have been approved as of Monday, totaling more than $247 billion — out of the $349 billion set aside for the Paycheck Protection Program. It's unclear how much has actually landed in the hands of small business owners.
- The average loan size is $239,152.
- About 725,000 loans — or 70% of all those approved so far — are for $150,000 or less, the smallest loan size range.
- More than 50,000 small businesses were approved for loans worth more than $1 million.
What's next: The pot of money will soon dry up and the Trump administration is haggling with Congress to allocate an additional $250 billion.