Majority of Emergency COVID Paycheck Protection Loans Went to Just 5 Percent of Companies

The Trump Administration has after legal wrangling over the data released the names of the 10 million businesses and individuals who received pandemic aid under the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP).

These programs were the main sources of support the federal government gave to small businesses hurt by the COVID-19 pandemic, and the centerpiece of the $2.2 trillion CARES act which was approved by Congress in March.

The Small Business Administration (SBA), tasked with approving and processing the money, had processed more than 5.2 million PPP loans to individuals which totaled $525 billion as of November. It also processed EIDL loans worth $195 billion.

New data has shown that more than half of the money from the Treasury Department's fund went to around 5 percent of recipients. In addition, the top 1 percent of loans accounted for more than a quarter of the total loan value.

The PPP data showed that around 600 companies hoovered up the maximum of $10 million allowed under the program. These were mostly larger companies.

As of August, more than 87 percent of loans were for less than $150,000, leading the Treasury Department and SBA to argue that the program primarily benefited smaller businesses.

However, new data highlights that more than half of the $552 billion in that time frame went to bigger businesses. The latest data show that only 28 percent of the money given out amounted to less than $150,000.

Among those that received the maximum $10 million in support included restaurant chains, law firms churches, and professional staffing services.

Newsweek has approached the SBA for comment.

Watchdogs have also warned that several billions of dollars may have gone to ineligible businesses and fraudsters, Reuters reported.

In September, Calvin Shivers, assistant director of the FBI's Criminal Investigative Division, testified to the Senate Judiciary Committee that the overall $3 trillion in coronavirus-related funding has been a popular target for potential schemers to the tune of $126 million.

The identified PPP fraud came from 116 probes conducted by the FBI, Justice Department, and Small Business Administration, Shivers said. Officials who spoke to lawmakers declined to say whether any individuals have been convicted at the time.

The SBA inspector general's office also said it had received tens of thousands of fraud tips and hundreds of investigations have been launched.

Senate Majority Leader Mitch McConnell has begun circulating plans to table a new round of stimulus with a further $332.7 billion in small business relief, including $257.7 billion earmarked for the Paycheck Protection Program, Axios reported.

The data released last night may be instrumental in shaping future stimulus policy and will shed a light on issues with previous programs.

Mitch McConnell
Senate Majority Leader Mitch McConnell (R-KY) talks with reporters following the weekly Republican Senate conference meeting in the Mansfield Room at the U.S. Capitol December 01, 2020 in Washington, DC. The Senate GOP leaders were asked about the chances of Congress passing another coronavirus relief bill along with must-pass government funding legislation. Tom Williams-Poo/Getty Images