HAMPTON ROADS, Virginia – With another set of Paycheck Protection Program loans, News 3 takes a look at where your tax dollars went in the first round.
New data released by the Small Business Administration describes who got what at Hampton Roads.
The Paycheck Protection Program was put in place by the US Small Business Administration several months ago.
They say the main goal of the program was to keep small business workers on the payroll.
But what defines a small business?
“The standard definition of a small business, according to the SBA, is 500 or fewer employees,” said Steve Bulger, regional administrator for the Small Business Administration.
Jim Carroll is vice president of small business at the Hampton Roads Chamber and director of the Small Businesses Development Center. He said the pandemic had been very difficult for small businesses for a number of reasons, including decreased cash flow, supply chain disruption, disruption in customer buying habits and more. people shopping online.
“People have just changed the way they do business,” Carroll said.
Old Dominion University professor and economics expert Bob McNab has analyzed the $ 2 billion he says has been pumped into our region through P3 loans.
Loans range from a few hundred dollars to $ 10 million, which several businesses in our region have obtained.
McNab said that 70% of the total loan value went to companies that received $ 150,000 or more, saving 65,000 jobs, while 30% of the total loan value went to companies receiving less than $ 150,000. $ 150,000, saving 55,000 jobs. But the SBA says not all jobs were flagged in the data and those numbers are likely to rise.
And while a number of loans have gone to small businesses, McNab said the majority of the money given out went to large and mid-sized businesses.
“This is something that we are seeing across the United States – that there is a disparity in how these loans are born; that the big companies got most of the loan value, ”McNab said.
The SBA said there was a formula for loans based on the number of employees and the amount they were making.
“I can understand that some people might look at it and say, ‘Oh, how come small businesses haven’t gotten so much? Well, they didn’t have that many employees. Large companies have more employees and the formula was based on the number of employees the loan was to support, ”Bulger said.
Bulger said the distribution process went quickly.
“We had essentially six days from when the CARES law was passed in late March and April until the program opened. Six days to put together the biggest loan program in our country’s history for small businesses, so everyone was scrambling, ”Bulger said.
Bulger said if lawmakers passed another round of P3 loans, the process would be changed. He said there were plans to reduce the number of employees that would be considered a small business instead of 500 or fewer employees.
He said they would also max out the highest loan amount at a number well below $ 10 million. He believes companies will also have to show and prove that they have suffered lost revenue. He said if a business is doing well and has rebounded, it should not be eligible for the loan.
McNab agrees to make the rules tougher to help small businesses more.
“If your intention is to provide a bridge for small businesses to get through the pandemic, then you need to structure the law in a way that favors small businesses,” McNab said.
“When you take a look at the volume of business and the volume of money that got the money out very, very quickly, was that the most efficient and effective way? No, but the SBA made changes as issues arose, so they did their best in a very, very difficult situation, ”Carroll said.