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Small Business Loans Flowed to Health Care, Construction and Big States – The New York Times

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WASHINGTON — Initial data released Monday by the Trump administration showed that businesses in big states like California and Texas received the most in loans from the government’s small business relief program, with health care, professional services and construction among the sectors that have tapped the largest amount of funding.

Of the $521 billion allocated through the Paycheck Protection Program, about $68.2 billion — roughly 13 percent — went to companies in California. Another $41.1 billion flowed to Texas businesses, based on data released Monday by the Treasury Department and Small Business Administration, which are administering the program.

The Treasury Department plans to provide more detailed information later Monday, including names and employment data for companies who received more than $150,000 in loans, according to a senior administration official. The figures will not include details on the roughly $30 billion in loans that were returned by companies that either realized that they were not eligible for the money, didn’t want to take the funds or worried that they couldn’t meet program requirements, which included using most of the money to pay employees.

The administration, in its initial release, said that money allocated through the program so far had helped support more than 50 million jobs. The share of overall small business payroll supported per state ranged from 72 percent in Virginia to 96 percent in Florida, according to the Treasury release.

The Paycheck Protection Program offers businesses with 500 or fewer employees loans that can be forgiven if the employer meets certain conditions, like using the bulk of funds to pay employees. An initial round of program funding was rapidly exhausted, but a second round saw slower demand, leaving the program with about $131.9 billion in its coffers. President Trump on Saturday signed legislation that extends the application deadline, originally June 30, to Aug. 8.

There was no apparent link between the amount of economic damage individual states have suffered amid the pandemic and how successful small businesses in a particular state were at accessing the loans from the program, the data show.

Four states in the Great Plains — North Dakota and South Dakota, Nebraska and Kansas — all saw loan approvals of at least 90 percent of their eligible small business payroll, even though they rank among the least-affected states in terms of unemployment claims during the crisis. Two of the hardest-hit states for claims, New York and California, saw loan approvals equal to about three-quarters of their eligible payrolls; by that measure, California companies would have received billions more from the program if they had seen approvals at the same rate as the Plains states.

Treasury Secretary Steven Mnuchin and Jovita Carranza, the head of the Small Business Administration, had previously said that they would release the names of borrowers who had received at least $150,000 through the program before the July 4 holiday weekend. A senior administration official said cleaning the data for public consumption took longer than anticipated, though it was provided to Congress on Friday.

The detailed disclosures coming later on Monday are the culmination of a monthslong fight over transparency. After initially refusing to disclose detailed information about borrowers, the Trump administration reversed course in mid-June, saying it would provide more data amid pressure from lawmakers and watchdog groups.

The push for detailed disclosure came after large companies tapped the program funds, which were initially in short supply. In the first few weeks after the program opened in April, public companies disclosed in financial filings that they had been among the beneficiaries. The revelation that big name-brand organizations like Shake Shack and the Los Angeles Lakers were getting bailout money prompted Mr. Mnuchin to push businesses that did not need the loans to return them.

Since then, the Trump administration — which has long argued that borrower information was “proprietary” and confidential — has been under mounting pressure over what it should disclose about who, exactly, is getting the money.

Small business groups lobbied the Treasury Department to keep loan information secret, and department officials expressed concern that publishing detailed payroll information about private businesses could leave them vulnerable to corporate takeovers or competitors trying to poach their employees.

But Democrats and left-leaning government watchdog groups said that the White House was refusing to be transparent and engaging in corporate cronyism. After Republicans in Congress also began grumbling that Treasury was thwarting their oversight responsibilities by withholding the data, Mr. Mnuchin relented.

The Paycheck Protection Program began handing out loans on April 3, just a week after Mr. Trump signed the $2 trillion stimulus bill into law. The quick turnaround meant many of the program’s guidelines were still being written as the government prepared to take applications.

After a brief hiatus, it began accepting loan applications anew on Monday.

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