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The Small Business Administration said Tuesday that it has stopped accepting Paycheck Protection Program loan guarantee applications, which provided more than $798 billion to small businesses during the pandemic.
SBA Administrator Isabella Casillas Guzman said Tuesday in a statement that the PPP provided over 8.5 million small businesses and nonprofits with "the lifeline they needed to survive during a once-in-generation economic crisis."
Guzman noted, however, that "millions of underserved businesses — particularly our smallest businesses and those owned by women and people of color — were left out of early rounds of relief," but that the SBA rectified these inequities.
"In 2021, 96% of PPP loans went to small businesses with fewer than 20 employees," Guzman said. "Moving forward, we will continue to prioritize equity in all SBA's programs and services."
The program has supported "the smallest of small businesses" with 32% of the loans going to low-and-moderate income communities, SBA said.
"The PPP was a consequential program," Leon LaBrecque, chief growth officer at Sequoia Financial Group in Troy, Mich., told ThinkAdvisor Wednesday in an email. "Thousands of businesses benefited by the program, but the execution was problematic. Now that the program is closed, I have seen many businesses who didn't use the PPP and should have. The businesses who didn't use it range from simple procrastinators, to skeptics, to people who viewed the program as a loan versus a forgivable grant."
The program, LaBrecque continued, "came out quickly, had a lot of problems in interpretations (I think 44) which created some significant misunderstandings. My clients who used the PPP are appreciative and found it very beneficial."
SBA also said that community financial institutions "played a pivotal role" in 2021 PPP lending to underserved communities during this period, providing 1.5 million loans totaling $30 billion, according to SBA.
PPP loans in 2021 averaged $42,000, another indicator of targeted relief to the smallest small businesses, SBA said.
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
