- With about one month left to go before the Paycheck Protection Program expires, lending picks up slightly after waning in April
- A total of $76 million in PPP loan were approved for Connecticut businesses for the week ending May 2
- PPP ends on May 31 and has about $33.5 billion left to disburse
Summary by Dirk Langeveld
Interest in the Paycheck Protection Program has picked up in Connecticut and across the nation as the popular program nears its deadline with no indication that it will receive further funding.
PPP loans totaling $76 million were approved for Connecticut businesses for the week ending May 2. This was up from $60 million in the week ending April 25 and $70 million in each of the two preceding weeks.
However, interest in the program has also waned considerably since the weeks ending up to its original March 31 deadline. A total of $210 million in PPP loans were approved for Connecticut businesses in the week ending March 14, dropping to $180 million for the week ending March 21 and $160 million for the week ending March 28.
Nationwide, weekly PPP lending fell from $16 billion for the week ending March 28 to a low of $7.36 billion for the week ending April 18. It increased to $8.33 billion in the following week and $9.74 billion for the week ending May 2.
The program, set up to provide forgivable loans to businesses to help them maintain payroll during the COVID-19 pandemic, has given out nearly $780.5 billion since it began. An initial appropriation of $350 billion was quickly depleted, although a subsequent round of funding ended in August with $130 billion unspent.
PPP was revived in December’s Economic Aid Act with $284.5 billion, and eligibility was tightened to focus on smaller businesses. Certain companies were also allowed to apply for a second draw PPP loan even if they had previously received a loan. The American Rescue Plan added another $7.25 billion to the program.
Approximately $33.5 billion remains available, and the program will continue accepting applications until May 31.
The limited time and funds remaining will likely nix a set of last-minute proposals introduced in Congress to modify the program. These have included making a more generous loan calculation formula for non-employer businesses retroactive to apply to borrowers who applied before the revision, expanding eligibility for certain seasonal businesses, and allowing businesses to use an alternate method to determine eligibility based on revenue losses.
No proposal has yet been put forward to continue PPP after its expiration. The program was one of the more popular federal COVID-19 relief measures, with both Democrats and Republicans backing further PPP aid in contentious debates leading up to the 2020 election over the size and scope of further aid packages.
There have been varying assessments of the effectiveness of PPP. One analysis suggests that the program only saved 1.5 million jobs, amounting to $377,000 in federal spending per position preserved. A Treasury report in December 2020 puts the number much higher, determining that 13.4 million to 17.3 million jobs were preserved due to PPP loans.
