About 31,000 businesses in the region received emergency loans
The federal government’s financial liferaft for small businesses in the early months of the coronavirus pandemic injected more than $ 3.5 billion into the Austin-area economy and helped support an estimated 350,000 local jobs, according to recently released data.
The Paycheque Protection Program, which was put in place quickly at the onset of the pandemic to provide forgivable loans to businesses across the country with 500 or fewer employees, has been criticized for lax reporting requirements and ‘other shortcomings.
But a second version is being considered for inclusion in a potential new coronavirus-related stimulus package currently being debated in Congress, and many observers consider it indispensable despite perceived problems with the first.
Loan recipients in Austin and some of the larger neighboring municipalities said they used the money to retain 347,358 combined jobs, which equates to more than a quarter of the region’s civilian workforce. More than 34,000 businesses in the region have received loans under the program, which were designed to cover around eight weeks of salary expenses and do not have to be repaid if they were used to avoid laying off workers.
“The (Paycheck Protection Program) was certainly not perfect in its deployment and implementation, but it played a critical role in maintaining economic stability during the early stages of the pandemic,” said Ray Perryman, chairman of the Perryman Group, a Waco-based company. firm of studies and economic analyzes.
He said it was essential that the federal government approve a new general stimulus package – including a new version of the Emergency Small Business Loan initiative – to support the economy in the last period before vaccines against coronaviruses are widely distributed.
“We are now 10 months away from the virus, and even well-run small businesses and well-run households have run out of cash,” Perryman said. “If we keep (the structure of the economy) together, we can recover quickly after vaccines and treatments get the pandemic under control.”
The US Small Business Administration initially refused to disclose the names of Paycheck Protection Program loan recipients or the amount they received.
In July, however, the agency released partial data – such as ranges of loan amounts and the names of loan recipients totaling over $ 150,000 – after numerous news agencies, including the American-Statesman, filed open file requests for information. It released a more comprehensive picture of the program this month, which included the names of all recipients and specific amounts.
In Texas, loans under the program totaled $ 41.2 billion statewide and have gone to about 411,500 companies, the data shows, supporting at least 4.3 million jobs. But the precise number of jobs remains uncertain – which is among the criticisms of the program – as some beneficiaries have not listed any.
Most of Texas’ loans, about 87%, were under $ 150,000. But loans over that amount made up 71% of money statewide, along with 62% of jobs listed as supported.
Loan recipients with addresses in the city of Austin received the bulk of the $ 3.5 billion in regional funding, nearly $ 2.7 billion, or about 75 percent. Austin businesses also accounted for 73% of the area’s jobs that were listed as retained due to the loans.
The Statesman previously reported that Alamo Drafthouse Cinemas and Torchy’s Tacos were among those receiving the highest loan amounts locally, and according to the new data, they were the only companies in the region to receive the maximum of 10 million. dollars authorized under the program. Each said they used their loans to support 500 jobs.
Over 85% of loans in the region were less than $ 150,000 and, on average, recipients in this category indicated that approximately four jobs were supported.
“I think deploying that capital, putting it in the hands of the companies that needed it most, was absolutely the right thing to do,” said Nikki Graham, president of the Austin market for Bank of America.
“I don’t think anyone would say it was a perfect program,” Graham said. “But I think it was absolutely necessary, and I think the business community and small business owners have certainly benefited from it.”
Graham, whose bank was among the main facilitators of the program’s nationwide lending to small businesses, said it also considers it important for Congress to approve a new stimulus package to help the economy. through the remaining period before the pandemic is brought under control.
In the Austin area, Graham said, Bank of America facilitated 2,847 paycheck protection program loans for a total of $ 181 million, for an average of about $ 63,500 each.
Regionally, “81% of these loans went to small businesses with one to five employees,” she said.
PPP loans in the Austin area
City Number of loans Total amount Jobs declared kept
Austin $ 23,966 2,664,491,016 253,367
Round rock 2 290 215 723 425 $ 23 321
Georgetown 1,426 134,052,609 $ 13,748
Cedars Park 1 476 119 067 205 13 193
Pflugerville 956 76 722 360 $ 8 396
San Marcos 824 73,803,330 $ 9,377
Leander 889 62 384 $ 212 6,438
Drip springs 565 47 927 523 $ 4,893
Buda 474 43 216 919 $ 4,308
Hutto 353 28 553 878 $ 3,168
Bastrop 402 25,297,631 $ 3,021
Kyle 357 21 170 051 $ 2,711
Bee cave 124 11 563 857 $ 1,417
* Source: US Small Business Administration data