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About three-quarters of small businesses in the United States applied for government-backed loans through the Payroll Protection Program, according to the Census Bureau, evidence of the widespread financial pain triggered by the coronavirus pandemic.
Roughly two-thirds, or 66.7 percent, of the businesses that asked for assistance, received the money, the Census Bureau said.
Under the Paycheck Protection Program, which Congress established as part of the $2.2 trillion CARES Act, businesses with fewer than 500 workers can secure low-interest loans of up to $10 million. If at least 75 percent of the money goes toward maintaining payroll, including salary, health insurance, leave and severance pay, within eight weeks, the federal government will forgive it.
The remaining 25 percent can be spent on operating costs like rent and utilities, but may not go toward mortgage principal or pre-payments. Money spent on non-qualifying expenses must be repaid at an annual rate of 1 percent within two years. No payments are required during the first six months.
The paycheck program was by far the most popular assistance program. It was tapped by 82.1 percent of small businesses that sought financial help, according to a survey conducted between May 10-16.
Another popular form of aid for businesses was the SBA’s Economic Injury Disaster Loans, a long-standing program that is typically only available to businesses affected by natural disasters. Initially, businesses could secure loans as high as $2 million through the EIDL, although the SBA has since capped the limit at $150,000, according to the Washington Post.
About 28 percent of small businesses applied for an EIDL, though only 15.4 percent received the aid.
Just 17.9 percent of businesses said they had not sought help since the outbreak forced a swath of businesses to close their doors. In total, 28 percent of small businesses had no assistance at all under any of the relief programs (although that figure includes respondents who never sought it).
The health care and social assistance sector was the most likely to have sought help, with more than 85 percent of businesses applying for some type of aid, according to the Census. About 81.8 percent of hotels and restaurants, one of the sectors hit hardest by the pandemic, requested financial assistance.