The Small Business Administration and Treasury Department disclosed loan-level data for over 660,000 loans in the Paycheck Protection Program this week, one of the biggest economic stimulus programs in history. The PPP disclosure shows 660,000 small businesses and nonprofit organizations that received at least $150,000 in funding. This is less than 15% of the total number of loans given out by the $2 trillion Cares Act.
The Washington Post compiled a list of the 82,708 businesses that received loans of more than $1 million. We combed through the data and found some troubling, but unsurprising oversights in funding for arts, education, media, food, and retail.
Accommodation and Food Services
Companies in Accommodation and Food Services, possibly the hardest-hit industry, account for just 5.95% of the list. The restaurant workforce makes up 10% of the overall US workforce, according to the National Restaurant Association. In April, over 5 million restaurant and bar workers lost their jobs, a record high. Despite the furloughs and layoffs, the industry faces lingering pain as even the restaurants that can open, are reduced to outdoor dining and curbside pickup, and many have struggled to get checks to landlords.
Eating and drinking establishments added about 3 million jobs from May to June, but it’ll take a lot more than that for the industry to recover. Without adequate assistance from the government, restaurant owners are forced to decide between opening back up and putting customers’ and workers’ lives on the line, or closing and risking bankruptcy.
Arts, Entertainment, & Recreation
Just 1.17% of businesses who received at least $1 million are in the Arts. Of course, this follows a long history of the US government throwing pennies at art and culture. Literally. $155 million of the 2019 budget was allocated to the National Endowment of the Arts and the National Endowment of the Humanities, which comes down to about 47.4 cents per person.
Compare this to countries like Germany, which spends an average of $20 per person on culture with a portion of its budget dedicated to purchasing work from living artists. Australia’s arts funding averages over $300 per citizen. Its 2019-2020 arts budget includes $31 million for Australia’s music scene.
Currently, 62% of artists in America are now fully unemployed due to COVID-19, according to a survey from the emergency relief fund Artist Relief. Artists’ average decline in estimated annual income totals $27,103.
7.76% of the companies on Washington Post’s list are in the retail industry. About 3% of these retailers are clothing and shoe stores, roughly 4% are supermarkets, and 1% are pharmacies. Over half of the listed retailers are new car dealers. And, like restaurants, many are staring down ugly bills from angry landlords.
If you’ve been reading this website, you know that the retail industry is in trouble. The Coronavirus pandemic has already hastened the looming retail apocalypse, putting struggling companies like J. Crew and Neiman Marcus into bankruptcy. Revenue dramatically dropped as brick-and-mortar locations closed or transitioned to curbside pickup only. Hundreds of thousands of retail workers have lost their jobs.
Educational Services account for 3.26% of the 82,708 businesses granted loans through the emergency program. This includes colleges and universities, trade schools, art schools, elementary and secondary schools, sports and recreation, and tutoring companies.
A few billion dollars across education services is substantial, sure, but these businesses will need more relief, especially within higher education. Colleges and universities are taking a massive financial blow as future semesters present a giant question mark. These schools will likely see a decline in enrollment and revenue, plus additional costs for safety equipment and social distancing redesigns.
Many universities have had to issue refunds, as the pandemic prevented students from utilizing campus services like dining halls and housing. Rutgers University has spent $50 million on refunds and will lose at least $183 million due to canceled surgical procedures at the school’s medical centers and New Jersey’s state spending freeze.
Businesses in the “Information” sector — including newspapers, software publishers, telecommunications companies, and other media — make up 2.07% of the companies on Washington Post’s list. Within the Information category, newspaper publishers received .09% of loans over $1 million, book publishers received .07%, and libraries and archives received .02%.
“Information” companies require ample federal support as fake news abounds. In April, over 240 House members signed a letter to President Trump asking to put government spending toward ads in local media. Many outlets rely on ad dollars, and that revenue stream has dried up amid the pandemic. Thousands of media workers have lost their jobs or taken pay cuts and furloughs. But, as far as the government is concerned, traditional media is on its last legs and it’s cheaper to pull the plug.
Most Represented Industries
The sectors with the highest number of companies receiving loans over $1 million include Construction, Manufacturing, and Health Care (thank god). 11,442 Health Care companies received these loans, making up 13.83% of the list. Manufacturing businesses make up 13.66% of the total company count and Construction companies comprise 13.19%.