HOUSTON — The most complete picture so far 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 it was implemented, and most of the money has already been dispersed.
The Small Business Administration, which has been in charge of the loan program, disclosed this week that roughly 411,000 loans were approved for Texas businesses. Of those, more than 98% were worth $1 million or less.
In total, Texas businesses received more than $41 billion in loans, including $13.8 billion to roughly 6,200 recipients that received more than $1 million each. Those 6,200 businesses made up about 1.5% of the total recipients, but they received about a third of the dollars.
The Texas companies supported by the $41 billion in loans reported retaining 4.3 million workers. This does not include roughly 60,000 businesses that reported they retained no jobs or did not say how many jobs they retained. This could be because of inconsistent data reporting and also because borrowers were not required to list the number of jobs they would retain, as the Chicago Tribune has found.
In Texas, for instance, four companies that received loans worth $10 million reported not having any jobs retained or didn’t say.
The data was released this week under an order by U.S. District Judge James E. Boasberg in Washington, D.C., rejecting the SBA’s request to keep the information secret. It was the program’s most revealing disclosure since July, when the Trump administration released names of 51,250 Texas businesses that received loans.
The data disclosed in July was incomplete, but it showed the broad scope of the program’s power: Businesses and nonprofit organizations from all walks of life were propped up, ranging from summer camps to country clubs to churches to Texas-based brands like Billy Bob’s Texas of Fort Worth and Lucchese Boots of El Paso.
The idea from congressional leaders and the Trump administration was the program would be better for the economy to keep businesses employing workers rather than overwhelm the unemployment insurance program. Another objective was to prevent businesses from going under altogether, which would further delay a future economic recovery.
Congress passed it in a rush early in the pandemic as businesses across the country were forced to shut their doors, threatening millions of jobs. Small businesses and nonprofits were 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 large coronavirus aid Congress has passed.
As the end of the year approaches and businesses are in the lurch again as the pandemic escalates across Texas and the country, most of the loan money from the financial safety net legislation from the spring is already out the door, according to a November survey from the National Federation of Independent Businesses.
Per the 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 do not improve, they will be forced to shut their doors.
Despite repeated attempts to pass a fresh round of economic aid, Congress and President Donald Trump have failed to pass a new deal. Congressional and Trump administration negotiators are frantically trying to pass a new bill before the holiday break. The main sticking points are how much to spend on the package and how much liability protection to offer businesses in the pandemic.
The largest cities in Texas have the most businesses, and thus received the most loans. The SBA dispensed more than 56,000 loans worth at least $6.9 billion to businesses in Houston, by far the largest tally of any city in Texas.
The SBA also sent more than 27,000 loans worth at least $3.7 billion to businesses in Dallas; more than 23,000 loans worth at least $2.7 billion to businesses in Austin; more than 20,000 loans worth at least $2.3 billion to businesses in San Antonio; and more than 11,000 loans worth at least $1.4 billion to businesses in Fort Worth.
While the new data offers a more complete picture of the lending 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 nonprofit local newsroom and a small business, applied for and received a loan through the Paycheck Protection Program in the amount of $1,116,626.