Please ensure Javascript is enabled for purposes of website accessibility

Small and Non-Banks Issue 20% of All PPP Loans in Round 2 So Far

By Bram Berkowitz – Updated May 6, 2020 at 11:57AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The SBA granted small banks with less than $1 billion in assets an eight-hour window where only they could submit PPP loan applications.

Small banks with less than $1 billion in assets and non-banks have lent 21% of all Paycheck Protection Program (PPP) loans issued in round two of the program thus far.

That's according to recent data put out by the U.S. Small Business Administration (SBA) and Treasury Department, which provides a detailed look at how the first $175 billion of round two has been disbursed, as of May 1. 

The total round will disburse $310 billion in PPP funds when it is complete, and follows an initial round that disbursed roughly $350 billion in just two weeks.

Small banks and non-banks -- which include community development financial institutions, certified development companies, micro-lenders, farm credit lenders and fintechs -- have issued 465,590 loans of the more than 2.2 million loans issued in round two.

SBA Loan

Image Source: Getty

While they have issued 21% of total loans, small banks and non-banks have only issued about 15% of the total dollar amount, primarily because these lenders are likely working with the smallest of businesses.

Following round one of the PPP, critics argued that too much of the PPP funding was going to larger businesses that did not really need it.

To assist small community lenders and ensure their small business customers had access, SBA Administrator Jovita Carranza recently designated an eight-hour window where the SBA only accepted loan applications from lenders with under $1 billion in assets.

Overall, lenders over $50 billion in assets still disbursed 53% of the $175 billion doled out in round two. Banks between $10 billion and $50 billion in assets have disbursed 16% of the funds, while banks under $10 billion in assets have distributed 32%. 

The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.