About 300 SMBs Received Less Than $99 In PPP

While the Paycheck Protection Program (PPP) was supposed to be a lifeline for struggling small- to medium-sized businesses (SMBs) during the pandemic, some SMBs that received loans less than $99 didn’t find much relief, The New York Times (NYT) reported.

There were roughly 300 businesses out of the over 5 million companies receiving loans that got $99 or less, according to NYT.

“Judith Less, who runs a thrift shop in New Jersey, got $27,” NYT reported. “Nikki Smith, a baker and caterer in Oregon, collected $96. A.J. Burton, the founder of a record label in Arkansas, got $78. And Susana Dommar, a chiropractor in Texas, received a loan for just $1.”

The small sums were also frustrating for the banks and other lenders which had made the loans to begin with, NYT reported. For each loan, they got just 5 percent of the value, so for a loan for $1, they received five cents.

This issue, NYT reported, is another illustration for how troubled the rollout of the previous PPP was due to the quick need and expedited debut.

Some of the stranger elements of the previous rollout might be repeated in the next round, NYT reported, with smaller amounts going to those who run one-person companies without fixed salaries for themselves, or other comparable situations.

José Martinez, the president of Prestamos CDFI, told NYT that the real losers in the previous PPP rollout were small mom-and-pop businesses like barbers, stylists, drivers, janitors and others, who didn’t make enough money to really reap the benefits.

Despite all of this, the economic outlook is more positive this year, said Chief Economist Jack Kleinhenz of the National Retail Federation (NRF). He said the new stimulus package could give the economy a boost alongside the vaccines being rolled out since late 2020. But he said he doubted the economy would be able to get back to pre-pandemic levels until well into 2022 or beyond.