Program Changes Increased Lending to the Smallest Businesses and in Underserved Locations

The Paycheck Protection Program (PPP) supports small businesses through forgivable loans for payroll and other eligible costs. Early lending favored larger and rural businesses, according to GAO’s analysis of Small Business Administration (SBA) data. Specifically, 42 percent of Phase 1 loans (approved from April 3–16, 2020) went to larger businesses (10 to 499 employees), although these businesses accounted for only 4 percent of all U.S. small businesses. Similarly, businesses in rural areas received 19 percent of Phase 1 loans but represented 13 percent of all small businesses. Banks made a vast majority of Phase 1 loans.

GAO

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