SBA Loans Study – Funding likely adequate

The Small Business Administration (“SBA”) released results by state for the $310 billion SBA loan Payroll Protection Program(“PPP”) by state. We have just completed a study of the data supplied thus far and have reached the following conclusions:

    • We believe it’s unlikely the PPP program will need more funds, and if it does the amount will be in the tens of billions not hundreds of billions of dollars.
    • Some states – mainly rural and/or plains states – have materially outperformed urban east and west coast states in terms of obtaining loans for their businesses.
    • The smallest of small businesses are starting to take a higher percentage of new loans.

Funds needed to supply all PPP eligible businesses

Per the U.S. Census Bureau there are approximately 60.5 million employees working at  firms with 500 full-time employees or less.  Also, there are approximately 5.5 million workers in the hospitality and food industries (i.e., NAICS code beginning with 72) whose firms are also eligible for PPP SBA loans. We estimate 50% of  NAICS 72 companies are eligible for PPP.  With an average PPP loan per FTE of $10,000,  we estimate a maximum of $633 billion is needed (before any SBA loan fees paid to banks). Consequently, the $659 billion already allocated by Congress may suffice especially after considering participation won’t hit 100%.


FTEs - <500 person firms60,556,081
FTEs> 500 (restaurants/hotels) 2,772,775
Total Potential FTEs to be covered by PPP loans63,328,856
Average Loan per Employee$10,000
Maximum Needed for PPP loans$633,288,560,000

Our current estimate of unallocated PPP funds (in billions):


We looked at the number of loans approved to the number of small businesses that exist in each state to determine the percentage of small businesses that have been approved for a SBA loan.

The data after the first tranche of $349 billion of SBA loans….

… and after $189 billion of the $310 billion has been allocated:

The outperforming states has not changed much to date with the exception of Tennessee who went from 21st to 9th between rounds 1 and 2 of PPP allocation by being the only state in the outperform list to obtain loans for a higher percentage of its small business in round 2 (43%) versus round 1 (35%).



There was more movement in the underperforming list from round 1….

… to round 2:

As expected, states that dramatically underperformed during the 1st round did better in the 2nd round. There were nine states that have been able to cover 40% or more of their small businesses so far in the 2nd round even though only $189 billion has been allocated (Arizona, California, Connecticut, Florida, Louisiana, Nevada, New Jersey, Tennessee, and Texas).

Map of SBA loans for all states – Round 1 of $349 billion


Map of SBA loans for all states – Round 1  + Round 2 through May 16

Small businesses versus larger businesses

Most of the negative commentary regarding the PPP program was the perception that banks prioritized their largest customers first. The breakdown of loans made between the two rounds…


For small firms with under 15 employees…

… clearly the number of very small firms received loans actually increased significantly in the second round of PPP loan allocation even though only $189 billion of the $310 billion has been allocated. We expect this trend to continue because most of the large firms have already received loans:


Average loan size (calculated incrementally) continues to decline….


… as well as average size of small businesses receiving an SBA loan:


The stratification of both rounds of funding shows that 99% of the largest eligible PPP borrowers have already been approved for loans, while 70% of the smallest firms have received loans:

Firm Size in FTEsLoan Size# of PPP Loans% of Loans$$$ ApprovedFTEs coveredAvg FTE/Firm# of FirmsLoans/Firms
~ 1 to 15<$150K3,691,06285.0%$132,351,881,71513,235,18845,121,23972%
~16 to 200$150K-$350K368,5058.5%$82,842,933,5678,284,29322
~16 to 200$350K-$1M197,7414.6%$112,599,464,89811,259,94657
~16 to 200$1M-$2M53,1421.2%$73,630,589,3347,363,059139
Rounds 1&24,341,145100.0%$513,271,137,35951,327,114205,977,98373%


Sources:,, Twitter accounts from White House officials, SBA Secretary, a U.S. Senator and national media outlets (Fox Business and CNBC) sourcing from the SBA.