Friday, April 17, 2020 Stamford, CT USA — As many as 24 million small businesses could be waiting for federal “Paycheck Protection” loans. With the Small Business Association (SBA) announcing this week that the program to administer these loans is out of money and Congress deadlocked on a second round of funding, it’s unclear how and when these companies will receive money intended to help them stay in business and pay worker salaries.

More than 80% of U.S. small businesses ($1-$10MM) have applied for a Paycheck Protection Program loan, according to a survey by Greenwich Associates.  Given there are approximately 30 million small businesses in the U.S., that means up to 24 million businesses could have applied. However, as of April 16th only 1.66 million businesses have received a loan approval according to the SBA.

“The gap between companies needing and wanting loans and those actually getting approval could be huge,” notes Steve Busby, CEO of Greenwich Associates. “Hopefully most of the larger and more needy businesses received approvals and there are not millions of qualified businesses who still need loans. If there are, Congress and the SBA may need to add another zero to the numbers they are currently talking about.”   

With 1.66 million companies receiving loan approvals and $349 billion currently available, that works out to be an average loan size of $210,000. The additional $250 billion now being debated in Congress would be enough to provide loans of that size to 1.2 million more companies. With up to 24 million businesses still wanting loans, the $250 billion would only cover about 5% of the businesses left out of the initial round. 

“It’s imperative that Congress move quickly to pass the new round of funding,” says Busby. “But given that there might be more than 20 million small businesses still in the queue for these loans, even the additional $250 billion would be just a start.”