Fewer than 10% of Iowa’s small businesses have been approved to receive aid through the Small Business Administration’s Paycheck Protection Program designed to help companies weather the fallout from the coronavirus pandemic, information provided to the Business Record shows.
Through Monday, 22,295 Iowa small businesses had been approved to receive more than $3.74 billion from the program, which was rolled out April 3, information from the Small Business Association shows.
The average size of a loan to an Iowa small business is $168,154.
About $350 billion was earmarked for the program in the $2 trillion federal coronavirus relief package signed into law nearly three weeks ago. According to the SBA, $247.54 billion in loans through the Paycheck Protection Program have been approved nationally for more than 1 million small businesses, defined as those with 500 or fewer workers.
The average loan size nationally is $239,152, according to the SBA. About 70% of the loans, or 725,058, were for $150,000 or less.
Business in three industries – construction, manufacturing, and professional, scientific and technical services – have received the largest payouts from the program, with each area receiving more than $30 billion, the SBA information shows.
Breakdowns are not yet available by state.
Iowa in 2018 had 267,733 small businesses, according to the SBA. Just 8.3% of the businesses received a loan through the Paycheck Protection Program.
More than 6,200 of Iowa’s small businesses are restaurants and bars, which were among the first in the state ordered to shut down. Twenty percent, or 33,006, of the 167,677 newly jobless Iowans were employed in the restaurant, bar and lodging industries, state unemployment data showed.
And while the Paycheck Protection Program’s goal is to help small business retain or rehire workers, it hasn’t been beneficial to the hospitality industry, said Jessica Dunker, CEO and president of the Iowa Restaurant Association.
“It’s a fiasco for our industry,” she said. “It’s a forgivable loan but only if you retain or hire back people and pay them during this crisis. When you’re mandated to close … I guess you can pay people to sit at home, but then aren’t we just becoming the unemployment rolls?”
Dunker said the 1% interest rates on the loans are attractive but most restaurant and bar owners are leery of taking on more debt.
She also said several restaurant owners have told her they tried to obtain a loan but have been unsuccessful. Nationally, there were numerous reports that the program got off to a rocky start when it first became available. Some of the country’s biggest lenders reported that they weren’t ready to process loan applications, and then when they were, they only accepted applications from their current customers.
RELATED: ‘Adapt and survive:’ Iowa’s 6,200-plus restaurants and bars dealing with adversity amid coronavirus-related closures
We want to hear your experiences
Have you applied or tried to apply for one of the Small Business Administration’s loan programs? Were you successful or were you turned away? Were you approved for a loan or turned down? The Business Record wants to hear about your experiences with either the Small Business Administration’s Paycheck Protection Program or the Economic Injury Disaster Loan. If you’d like to share your story, contact firstname.lastname@example.org.