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“Pathetic Number Of Loans” – Democrats Complain SBA Rescue Loan Program Was Unevenly Distributed

Courtesy of ZeroHedge View original post here.

In the first two weeks of the Trump administration's Paycheck Protection Program (PPP) for small businesses crushed by coronavirus, the credit spigot was wide open. Still, it was not evenly distributed across the country.   

On a geographical basis, loan amounts for firms were approved at a very high percentage in Central, Midwest, Rust Belt, and Southern states, compared with lower numbers for coastal ones. 

Bloomberg notes the findings were calculated via Evercore ISI estimates of eligible payrolls in each state, suggests the $342 billion of Small Business Administration (SBA) loans were 'unevenly distributed' in the first two weeks of the program ending on April 16. 

The disparity between individual states was evident in New York. SBA loan approvals were as low as 23% on April 13, while other states had a higher degree of approved loans for small firms. Then right before the fund ran out of money, approved loans in the state jumped to 40% from 23%. This phenomenon was also seen in California. 

Ernie Tedeschi, the Evercore analyst responsible for computing the available payroll figures, noticed hard-hit states with early lockdowns saw firms have the most trouble in arranging rescue loans.

Tedeschi said some companies in hard-hit states did not apply for the loans because it wouldn't be impactful. He added that some firms received loans much quicker in some states because they had better relationships with community banks. 

Judging by the distribution of the loans on a state by state basis, one thing is evident: it appears Republican states were favored to a higher degree than Democratic states, which was noticed by Jackie Speier, a Democratic congresswoman from California, who tweeted last week: 

"I'm hard-pressed not to think that this is political," Speier said. "Blue states like California got a pathetic number of loans."

Democrats have found something else to b*tch at — not just President Trump's virus response… 

 


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