About $3.75 billion has flooded into Iowa businesses in the first week of a new coronavirus stimulus package.
According to the U.S. Small Business Administration, banks had issued 22,295 federally backed forgivable loans to businesses in the state through Monday. The loans are part of the Paycheck Protection Program, which supplies money to small business owners to keep employees on their payroll for at least two months.
The program started April 3, though Iowa community bank CEOs told the Des Moines Register there were delays as they tried to process loan applications. Some could not get into E-Tran, the SBA's online processing program, for the first weekend that the loans were available.
Monday's data is the first glimpse into how the money is flowing, and Iowa is faring better, comparatively, than some other states. The $3.75 billion its businesses have received ranks 24th among states, though Iowa's population of 3.1 million ranks 31st, according to a U.S. Census Bureau estimate. (Texas and California, the country's two biggest states, ranked first and second, respectively, in loans received through Monday.)
The new data also shows that the SBA is close to hitting its funding cap. As part of the Coronavirus Aid, Relief and Economic Security, or CARES, Act passed on March 27, Congress set aside $349 billion for the Paycheck Protection Program. The banks had issued about $246 billion in SBA-guaranteed loans through Monday.
Some members of Congress have debated passing another stimulus package that would put more money in the program.
Under the Paycheck Protection Program, small business owners can receive a loan equal to about 2 1/2 months of payroll. The owners do not have to pay the money back as long as they spend 75% of it on employee salaries. They can spend the rest on rent, utilities and mortgage payments.
Business owners also must maintain the same number of employees, at the same pay, they had before governors ordered businesses to close to slow the spread of coronavirus. The SBA will reimburse the banks for the balance of forgiven loans.
Each business owner is eligible for up to $10 million. But according to the SBA's data, most loans have been much smaller, with about 85% totaling $350,000 or less.
According to the SBA, about two-thirds of the loans have gone to businesses in six sectors: construction; professional, scientific and technical services; manufacturing; health care and social assistance; accommodation and food services; and retail trade.
The Paycheck Protection Program is one of two SBA loans available to small businesses in response to the coronavirus spread. The other, the Economic Injury Disaster Loan, will provide up to $2 million at an interest rate of 3.75%.
The New York Times has reported the fund for that loan is running low, and the agency told some businesses owners it can only lend them about $15,000. Spokespeople for the SBA have not responded to the Des Moines Register's requests for clarification about the program.
Tyler Jett covers jobs and the economy for the Register. Contact him at 515-284-8215 and tjett@registermedia.com. Follow him on Twitter @LetsJett.
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Here's how much Iowa businesses have gotten from stimulus package loans - Des Moines Register
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