The Bank Policy Institute (BPI) has released data from a survey of the nine largest retail banks regarding loan originations from the first two rounds of the Paycheck Protection Program (PPP). It appears that the mega-banks have primarily served the businesses that PPP was intended for – small businesses.
The nine banks are Bank of America, Capital One, Citibank, JP Morgan Chase, PNC, TD Bank, Truist, US Bank, and Wells Fargo, and these banks disbursed nearly 1 million PPP loans to small businesses.
- The average loan was $115,000 (smaller than the program average of $130,000);
- 64% of loans were for amounts under $50,000;
- 51% of all loans went to businesses with fewer than five employees;
- 75% of all loans went to businesses with fewer than ten employees; and
- 98% of loans went to businesses with less than 100 employees.
This data demonstrates that the nation’s largest banks lent to America’s smallest businesses in extraordinary numbers. This is very good news and indicates that the PPP essentially served its stated purpose – to allow the smallest companies the best chance to survive this crisis.