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Only 5.7 percent of U.S. businesses received Payment Protection Program relief, according to a new report from business research website Business.org.
PPP is designed to incentivize companies with fewer than 500 employees to retain staff despite difficult economic conditions that have resulted from the coronavirus pandemic. Applicants can receive up to $10 million, which can be forgiven in certain cases. At least 75 percent of the money must be put toward payroll costs.
The Trump administration allocated an initial $350 billion in funding for the program, which went to 1.6 million U.S. businesses, or 5.7 percent of the country's total number of businesses, before the money ran out and lenders were forced to stop accepting applications.
The report from Business.org shows what percentage of businesses in every U.S. state received PPP funding, and the results show that companies in middle America benefitted most from the PPP despite getting the least amount of funding.
North Dakota came in first place with 15 percent of the state's small businesses receiving PPP funding, although only 11,002 loans were granted. Conversely, California came in last place with only 2.8 percent of the state's small businesses receiving funding even though 112,967 loans were granted.
In Florida and New York, businesses received more than 80,000 loans, which representis only 3.6 and 3.7 percent of the state's companies, respectively.
"Because financing ran out so fast, many states with larger business populations were left with a low percentage of loan approvals. The top 10 most financed states, for example, all have fewer than 500,000 small businesses, whereas many states in the bottom 10 have millions. This has left these denser areas in dire need of extra help," the report reads.
Other states with the highest percentages of small businesses that got funding include Nebraska, South Dakota, Wyoming, Montana, Iowa, Kansas, Maine, Oklahoma and Wisconsin. Other states with the lowest percentages include Nevada, Arizona, New Jersey, North Carolina Maryland, Georgia and Washington, D.C.
The administration and Senate Democrats reached a deal Tuesday on new $484 billion coronavirus relief legislation, which allocates an additional $250 billion to PPP, $60 billion to the Small Business Administration’s emergency disaster loan program and $60 billion to small banks and community development banks. About $100 billion will go to hospitals and coronavirus testing.
Small business owners can apply for PPP loans on Business.org's website.