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SBA: Exclusivity period results in PPP loans to underserved

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The 14-day period that reserved the second round of Paycheck Protection Program federal loans only for small businesses or nonprofits with 20 or fewer employees has ended with more than 400,000 entities serviced, according to a news release by the U.S. Small Business Administration.

“Expanding equity and opportunity in the Paycheck Protection Program is a top priority for the Biden-Harris Administration,” said Patrick Kelley, associate administrator for the SBA’s Office of Capital Access. “More than just providing access, the latest data represents a step in the right direction for our agency-wide mission to support the smallest of small businesses — Mom-and-Pop, women- and minority-owned businesses — which will strengthen our communities and help set America’s economy on the right path.”

The SBA stated that, comparing the 14-day small-business exclusivity period to the 10 days of lending before that, loans for minority-owned businesses increased 20% each day, loans for women-owned businesses went up by 14% a day, and loans to businesses in rural areas went up 12% each day. That totaled about 2,600 more loans each day for those types of businesses compared to the 10 days before.

More changes were implemented March 5 to reduce barriers to lending — such as removing flags for applicants who are immigrants, had student loan debt or non-fraud felony convictions — which resulted in “tens of thousands” of new loan applications, according to the federal agency.

The SBA website also indicates that 2.4 million PPP loans totaling $164.95 billion have been approved with the second round of stimulus funding after Congress approved an aid package in December 2020. The early 2021 package provided $285 billion for the program, which leaves about $120 billion still remaining from the second round. An additional $7.25 billion has been funded by the third stimulus package signed into law Thursday.

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Total PPP loans, including the original funding provided by the Coronavirus Aid, Relief and Economic Security Act of March 2020, has totaled $687.37 billion. Total loans approved number about 7.56 million.

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