There’s more evidence that pandemic relief to small business is not ending up where it is most needed.
A study by the personal finance website SmartAssetshows that the states with the highest COVID-19 infection rates, notably New York and New Jersey, had the lowest percentages of their eligible payrolls covered by the first round of the Paycheck Protection Program.
New Jersey has the second-highest infection rate but had the fifth-lowest rate of PPP funding, just over 50%, while New York, with the most infections, had just 44% of eligible payroll expense covered by the loans -- the second lowest.
In fact, states with the lowest infection rates had far higher percentages of their eligible payrolls covered by the program. Nebraska has the 11th lowest rate of infection but 90% of its payrolls were covered by these loans.
SmartAsset said one reason could be a problem processing the loan applications in heavily populated states, because the loans are given out by local banks and not directly by the federal government or even the Small Business Administration.
The first round of funding, $349 billion, was gone in less than two weeks. A second round, $310 billion, is now available. Smart Asset said the results could conceivably be different if there are new guidelines designed to broaden the initiative’s reach.