Fewer than three in 10 small businesses in California’s five largest metro areas—including Santa Clara County—that applied for the Paycheck Protection Program [PPP] loan are receiving one, according to a recently published survey.
The PPP is the largest fixture of federal coronavirus financial relief, providing forgivable debt to small businesses with fewer than 500 employees to cover payroll and associated costs. The initial $349 billion in PPP funding was exhausted in just two weeks.
Because the loans were disproportionately allocated to certain parts of the country, an additional $310 billion was apportioned to continue the program.
SmartAsset, a New York City-based fin-tech firm, analyzed data from a U.S. Census Bureau pulse survey to see how PPP acceptance rates have changed in the nation’s 50 largest metro areas since early last month.
The South Bay—at 23.1 percent—ranked second to last for its PPP acceptance rates. Other California regions that ranked in the bottom 10 include Los Angeles/Long Beach/Anaheim (27.3 percent), San Diego/Chula Vista/Carlsbad (29 percent) and San Francisco/Oakland/Berkeley (29.1 percent).
SmartAsset spokesman Casey Luneva said that while the analysis did not examine underlying factors, “logistics could influence the acceptance rates.”
“More specifically, since loans are given out by local banks and not directly by the federal government or the U.S. Small Business Administration (SBA), local lenders in highly-populated states like California with many small businesses may not have been able to process all the applications as quickly,” Luneva said in an email to San Jose Inside.
Despite its low ranking, the San Jose/Santa Clara/Sunnyvale area is following the national upward trend showing that PPP funding is catching up to demand.
In 27 of the 50 metro areas in the survey, less than half of the submitted applications were accepted following the first round of funding. The numbers look much more promising in the second round—which is ongoing—as more than four in five loan applications have now been approved in all 50 metro areas.
