The United States Small Business Administration (SBA) announced the closure of the Paycheck Protection Program (PPP) to new loan guaranty applications on June 1, which provided over $798 billion in economic relief to small businesses and nonprofits across the country in response to the effects of the COVID-19 pandemic.
“The Paycheck Protection Program provided over 8.5 million small businesses and nonprofits the lifeline they needed to survive during a once-in-generation economic crisis. I’ve heard story after story from small business owners across the country about how PPP funds helped them keep the lights on, pay their employees—and gave them hope,” said SBA Administrator Isabella Casillas Guzman. “At the same time, 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. I’m proud of the work we did to begin to rectify these inequities—in 2021, 96 percent of PPP loans went to small businesses with fewer than 20 employees. Moving forward, we will continue to prioritize equity in all SBA’s programs and services.”
The program supported the smallest of small businesses with 32 percent of the loans going to low-and-moderate income (LMI) communities. Additionally, community financial institutions (CFIs) played a pivotal role in 2021 PPP lending to underserved communities during this period, providing 1.5 million loans totaling $30 billion. PPP loans in 2021 averaged $42,000.
The PPP was one of eight disaster relief programs established by Congress to assist small businesses during the pandemic, including the Economic Injury Disaster Loan (EIDL), EIDL Advance, Targeted EIDL Advance, Supplemental EIDL Advance, Restaurant Revitalization Fund, Shuttered Venue Operators Grant, and SBA Debt Relief program.
