Small businesses in the U.S. health-care and social-assistance industry have emerged as the top recipients of federal coronavirus relief loans, even as the net amount of approved funding in the program continues to decline amid loan cancellations.
In the latest report, which combines totals from the first round and the second round that launched on April 27, health-care firms had received 470,369 loans worth $65.9 billion, followed by professional services with 581,708 loans totaling $65.1 billion, the report shows. Construction and manufacturing were the other two industries with more than 10% of the total funding so far.
Through May 30, almost 4.5 million loans had been approved worth $510.2 billion. The loans can become grants if at least 75% of the proceeds are spent on payroll in the eight weeks after money is received.
That net dollar amount is more than $3 billion less than the net dollars approved as of May 16, even though almost 134,500 additional loans were approved during that time because loans are being canceled. Almost $21 billion in PPP loans have been canceled since May 8, according to calculations by Bloomberg News using SBA data.
Canceled loans include returns, duplicates and loans that weren’t closed for other reasons, according to the SBA. Some larger, publicly traded companies sent their loans back after public outrage over their getting funding at the expense of smaller businesses.
While SBA hasn’t provided an accounting of cancellations, advocates for small firms expect the bulk of returns are from companies that don’t think they can spend proceeds in the eight-week loan-forgiveness period or are concerned about a promised audit of loans of more than $2 million.
Restaurants and others firms are pushing Congress to extend the loan-forgiveness period to 24 weeks and to allow more flexibility for spending proceeds because they can’t reopen or be fully functional in eight weeks and don’t want to repay portions of a loan they thought would be a grant.
The House passed a bill 417-1 last week to make those changes, and Senate Majority Leader
About $130 billion remains from the $320 billion in the second round of funding approved by Congress. The initial tranche of $349 billion when the program launched April 3 was exhausted in just 13 days as millions of businesses flooded lenders with applications.
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