Big York County firms have eaten up much of the PPP money

0

Relatively large employers in York County received more than 70% of the locally distributed funds from the Federal Paycheck Protection Program, a program that, according to analysis by The York Dispatch, was in part designed to keep small businesses afloat during the coronavirus pandemic.

The disproportionate approval of large federal loans in York County came to light after the U.S. Small Business Administration released a list of companies Monday that had received loans under the program.

The data released by the SBA divides loans into two categories: loans under $ 150,000 and loans over $ 150,000.

More: Coronavirus Pandemic: This is what York County’s data looks like

More: The loss for Dover with Washington Twp is millions higher than expected. Move

In York County, the program has granted loans of at least $ 232 million. Of that, approximately $ 62 million, or 27%, was on loans less than $ 150,000. About $ 170 million, or 73%, went to companies that wanted more, often significantly more.

For example, Maple Donuts received between $ 2 million and $ 5 million, but it’s impossible to determine the actual dollar amount from the data available.

York County’s largest $ 5 million to $ 10 million loans went to SpiriTrust Lutheran, OSS Health, Precision Components Group, and Wagman Inc.

The program, which was first implemented in the federal CARES Act in March, was intended to be a lifeline for small businesses and their employees.

But experts have already started to see problems with the program.

“Without some major changes, many true small businesses will continue to fail,” wrote Aaron Klein, an economics scholar at the Brookings Institution. in a comment on Politico.

One solution Klein offered was to limit all loans to $ 1 million since “only 4% of the loans in the first batch (of the PPP) were more than $ 1 million, but 44.5% of the original $ 349 billion congressional consumed “. put into the program. “

And The York Dispatch’s estimates, based on the SBA data, are likely on the low end.

In York County, about 81% of the 2,076 loans distributed were less than $ 150,000, although that group made up less than 30% of the total dollar total.

On Capitol Hill, approval or disapproval of the paycheck protection program has often been biased.

“I’m concerned the paycheck protection program hasn’t done nearly enough for really small women’s, veteran, and minority businesses on Main Street,” said US Senator Bob Casey, D-Pa.

However, Republicans like US MP Lloyd Smucker, R-Lancaster, have argued that the program has proven that it is working as intended.

Smucker spokesman Eric Reath found that 86.5% of the program’s loans across the country were less than $ 150,000, which he said shows that the program “really helps the smallest businesses.”

“This program is undoubtedly helping companies maintain thousands of family-sustaining jobs in PA-11,” said Reath.

Some local businesses agreed, saying the loans could save jobs.

SpiriTrust Lutheran, a nonprofit, faith-based organization that provides services from assisted living to rehabilitation and counseling, received $ 6.75 million, which helped the company retain its 900 employees.

That’s especially important because the company serves older adults who are more prone to COVID-19, spokeswoman Crystal Hull said.

“To us, it means that our team members stay busy and keep doing their jobs and providing important community service,” said Hull.

Much of the pie, however, was made up by corporations in terms of their share of the credit.

Of the more than 390 larger loans disbursed to corporations – which can be up to $ 10 million each under the federal program – approximately $ 126.6 million, or 74%, went to companies operating either as corporations or “Subchapter S-Companies” are listed.

Of the 1,600+ smaller loans offered to businesses, $ 30 million, or 48%, went to corporations or suburban companies.

Under the PPP, companies are eligible for loans of up to $ 10 million with a term of two to five years.

Initially, companies had to use 75% of the funds to cover labor costs in order to achieve full forgiveness. This has since been reduced to 60% under the Paycheck Protection Program Flexibility Act passed last month.

As early as March, the initial US $ 349 billion that the CARES Act had made available for the program had dried up in just two weeks.

Then, in late April, lawmakers approved an additional $ 310 billion, and it is unclear whether further funding will be made available.

This is part of a series on The York Dispatch. The dispatchers deal with a new topic at regular intervals, which in our opinion deserves a closer look.

– Logan Hullinger can be reached at [email protected] or on Twitter at @LoganHullYD.


Source link

Share.

About Author

Comments are closed.