On June 1, 2021, Small Business Administrator Isabella Casillas Guzman announced the closure of the Paycheck Protection Program (PPP). Since the PPP was first introduced through the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act), it has dispersed $798 billion in loans to small businesses and nonprofit organizations.
Over 8.5 million employers received PPP loans to cover payroll costs and nonpayroll costs such as rent, mortgage interest, and utilities since the program began. The program was so popular that it was extended and modified on multiple occasions including the introduction of Second Draw PPP Loans through the Consolidated Appropriations Act, 2021 (CAA, 2021) and propped up with additional funding with the last COVID-19 relief bill, the American Rescue Plan Act (ARPA).
After some initial backlash that the smallest businesses were having difficulties obtaining a PPP loan, the SBA noted that in 2021, 96% of PPP loans went to business with fewer than 20 employees with the average loan at $42,000.