The Small Business Administration’s Paycheck Protection Program, which allowed for a cap of $349 billion in loans to small qualifying firms in need because of the coronavirus outbreak, ran out April 16, according to www.constructiondive.com.
The construction industry received 177,905 loan approvals, totaling just under $45 billion—more than any other industry. About 13% of all loaned funds went to small-business contractors.
Kristen Swearingen, vice president of legislative and political affairs for Associated Builders and Contractors, said construction’s tendency to receive the loans likely resulted from the industry widely being considered an “essential” business during this period of mandatory business shutdowns.
The program’s funds ran out in just 13 days, and it is expected more money will be added to the program. Small businesses must have 500 or fewer employees or qualify with the SBA’s guidelines to get loan approval.
Once secured, recipients must maintain payroll costs first, and remaining funds available can be used for most mortgage interest, rent and utility costs for the period of eight weeks after the loan is received. If they maintain existing employee and compensation levels during that period, recipients can apply for full loan forgiveness.
Contractors who were members of local banks reportedly had more success getting loans than those who went to larger banks; the larger banks quickly hit their caps because of the immense demand. A total of 4,975 banks provided the Paycheck Protection Program loans, and 74% of loans approved were for less than $150,000.
