Oregon businesses receive more than $3 billion in second round of coronavirus rescue loans

Thousands of Oregon small businesses that were unable to access Paycheck Protection Program loans from the Small Business Administration during the program’s first round of funding have managed to secure loans in the program’s second round.

Data released by the Small Business Administration shows that 31,119 Oregon businesses received approval for loans through the program between April 27 and May 1. Those businesses will receive just over $3 billion in funding for an average loan size of just over $97,000.

The Paycheck Protection Program, which is supposed to give small businesses a lifeline during the COVID-19 crisis, was criticized in April for giving loans to large companies and favoring certain states over others. Congress approved an additional $310 billion for the program in late April after it ran out of its initial funding in 13 days. Applications for the second round of funding opened April 27.

Some of the issues that marred the program during the first round of funding seem to have been addressed during the second round.

A total of 18,732 Oregon businesses had loans approved during the initial round of funding. Those businesses received $3.8 billion for an average loan size of just over $200,000.

After that first round, an analysis by Bloomberg ranked states by loan amounts as a percentage of eligible payrolls. Oregon was near the bottom, at 42.2%.

After the first week of second round funding, Oregon businesses had received nearly 76% of what they were eligible for under the program, according to Bloomberg. That’s close to the national rate of 81%.

Oregon businesses secured about 1.1% of the $342 billion in loans reported as of April 16, a little less than its 1.4 % share of the U.S. population. But Oregon businesses had secured 1.7% of the $175.7 billion in loans approved in the second round of funding as of May 1. The program still has $134.3 billion left to distribute to businesses across the country.

The Paycheck Protection Program loans were designed to give businesses with fewer than 500 employees loans to support eight weeks of payroll, while allowing businesses to use leftover funds on mortgage interest, rent and utilities. If employers maintain pre-COVID levels of employment after eight weeks, the loan is forgiven. Unforgiven balances convert to a two-year loan with an interest rate of 1%.

The program was criticized in April after reports emerged that large publicly traded companies, including national restaurant and hotel chains, had received millions of dollars in funding through the program. At the same time, small businesses in Oregon and throughout the country were complaining about difficulties accessing program funding.

Oregon’s U.S. senators Jeff Merkley and Ron Wyden, both Democrats, were among 22 senators who sent a letter to Secretary of the Treasury Steven Mnuchin and Small Business Administrator Jovita Carranza last week urging them to develop strong supervisory mechanisms to ensure that the second round of Paycheck Protection Program funding reached struggling small businesses.

“As small business owners await distribution of the additional funding provided for the program in the Paycheck Protection Program and Health Care Enhancement Act, it is critical that the funding provided by Congress be used to provide loans to the businesses whose owners and employees’ livelihoods are truly at risk as a result of the pandemic,” the senators wrote.

Based on the new data, it appears that more small businesses were able to access funding in the second round.

Small businesses across the country had been approved for 2.2 million loans in the second round of funding as of May 1, with an average loan size of $79,000, down from $206,000 in the first round of funding.

Still, loans over $2 million accounted for over 16% of the total pool of money distributed in the second round, despite accounting for just 0.35% of the loans offered. Mnuchin said last week that all companies receiving relief loans over $2 million will be audited.