Coronavirus Economy: Companies Giving Back Paycheck Protection Loans, Leaving $100 Billion Still Available

Data from the Small Business Administration shows $18 billion in paycheck protection loans have been canceled for a variety of reasons, including 67 loans granted to publicly traded firms worth $433.7 million.

Congress approved more than $650 billion in paycheck protection loan funds in two measures. The first, approved March 27 for $349 billion, was depleted in less than two weeks, much of it allocated to larger companies, freezing out smaller firms and lenders. The loans are to be forgiven if 75% of the funds are used to keep employees on the payroll.

Loans to companies like Shake Shack and the Los Angeles Lakers prompted a public outcry that resulted in a number of companies returning funds. The administration also warned it would review any loans of more than $2 million to determine whether a company actually qualified.

A Washington Post analysis earlier this month indicated $1 billion in loans went to 300 public companies.

Data analyzed by Bloomberg News showed as of Tuesday night 4.4 million paycheck loans worth $512.9 billion had been approved. Earlier, the SBA had reported $531 billion had been approved through May 8.

The SBA has yet to provide a comprehensive accounting for the program. Administrator Jovita Carranza tweeted April 27 that $2 billion from the first round of funding had been declined or returned.

FactSquared said 67 loans totaling $433.7 million to publicly traded companies had been returned. Most of the returned funding, however, came from closely held, private companies, Bloomberg said.

The pace of loans has been slowing with $100 billion left in the pot as of Saturday. A report issued Monday showed loans averaged $118,000, down from the $206,000 average in the first round of funding.

Businesses and lenders have been lobbying for changes to the loan program, particularly for lengthening the period employers have for spending the funds. The current limit is eight weeks, but states have just begin lifting restrictions and many businesses remain closed. Lawmakers on both sides of the aisle are working on changes, including lifting the 75% rule for forgiveness.