S&P: Small Businesses Still Hurting Despite PPP

In comparison, information services and financial industries received 36% of loans with 5.3 million lost jobs, and service industries received 35% of loans while accounting for 12.9 million lost jobs (62.9%) in the first round, the report said.

Meanwhile, seven out of 10 states that received the largest loan amounts during the first round had the lowest unemployment rates, while eight out of 10 states that received the smallest loan amounts had the highest unemployment rates, according to the report.

One major improvement in the second PPP round is that the average loan size seems to be $73,000 — "less than half of PPP1," according to S&P Global, noting the data available so far was only through May 8.

The money is also reaching more of the right states and industries, the report said. Still, however, seven states with the highest employment rates are receiving a bigger slice of loans, it noted. In comparison, only one of the 10 states with the lowest unemployment rates has received one of the top 10 loan amounts, the report said.

Meanwhile, a "nagging concern is whether the 80% (over 18 million people) considered to be 'temporarily unemployed' will turn permanent, just as their extended benefits expire" under the Coronavirus Aid, Relief and Economic Security Act's enhanced unemployment insurance benefits, the report said.

"Given that small businesses employed 59.9 million workers in 2016 (47.3% of the U.S. total), the success of PPP will have far-reaching consequences for not only the pocketbooks of these workers, but also for the recovery overall," S&P Global predicted.

Through May 8, the second PPP round had "only doled out $188.9 billion, or 61% of its total funds, and no loan approval information was yet available by industry," the report said. S&P Global recognized that a business's pre-virus financial health "starting point" ought to be "considered when determining decisions to lay off workers," the report said. However, "this preliminary analysis may provide some framework when gauging next steps in policy decisions as the U.S. economy begins to slowly recover and businesses open their doors," it said.