SBA Data Suggests Possible Front-Loading of Larger PPP Loans

by AlexanderEfrosCPA

Per review of the Paycheck Protection Program reports released by the SBA on 4/13/2020 and 4/16/2020 (a difference of just 3 days), the average approved loan size decreased from $239,152 to $206,000 (a decrease of over 13%). Furthermore, the total number of loans approved in the amount of $150,000 and lower increased by 70% throughout that same 3-day period while the bigger loan categories increased by only 43% at the highest. I have assembled the information published by the SBA into a spreadsheet and highlighted the pertinent sections in red to allow for a clearer visualization of the data. The spreadsheet is linked below:

drive.google.com/open?id=1qQsdaMAI4aJyk7wtbO54d_kzzrjyk156

There are several possible explanations for these variances:

  1. Bigger businesses were able to submit applications earlier than their smaller business counterparts;
  2. Smaller businesses submitted incomplete/incorrect applications which required subsequent follow-up and delayed the loan application process;
  3. Owners of smaller businesses may not have been properly advised regarding the PPP program in a timely manner.

Aside from the above-mentioned possible explanations, the information may be indicating that bigger loans were indeed front-loaded and given preferential treatment as opposed to being handled in a first-come first-served manner. Of course, further information regarding the applications themselves would allow for a more in-depth analysis of the data to ascertain whether there was indeed favoritism towards the larger loans.

I also made a video analyzing the situation which may be found here: