Louisiana businesses have been approved for $2.02 billion in federal Paycheck Protection Program loans, just weeks after the U.S. Small Business Administration began taking applications for a second round of funds.
More than 25,100 organizations were approved between Jan. 1 and Feb. 15 in Louisiana for the forgivable loan program, which is meant to support payroll of organizations suffering through significant economic hardship during the coronavirus pandemic. Banks processed more than 79% of the applications.
Nationwide, more than 6.8 million loans were approved for small businesses totaling $126 billion. The average loan was $75,000. Accommodation and food services businesses accounted for 18% of total loans, followed by 13% for construction companies, and 11% for professional, scientific and technical services businesses.
Congress carved out $284 billion in December's coronavirus relief package for the loan program. Under funding that ended in early August, more than $525 billion was approved across 5.2 million loans nationwide in the first round of funding. In Louisiana, more than $7.6 billion in loans went to nearly 78,000 businesses during the first round.
Existing borrowers with no more than 300 employees that have suffered at least a 25% drop in quarterly revenue may be able to receive up to $2 million in a forgivable loan in the latest program. First-time borrowers with no more than 500 employees may get up to a $10 million loan. The five-year loans, based on payroll expenses for either 2019 or 2020, will have an interest rate of 1%. Sixty percent of the loan must be used for payroll to qualify for forgiveness. Companies can use the rest for employee health benefits, mortgage interest, rent, utilities and expenses that are essential to business operations.
Restaurants and other hard-hit businesses, which have been operating with limited capacity for months, could seek a forgivable loan up to 3.5 times monthly payroll costs. All other businesses could get up to 2.5 times monthly payroll. Applications are due by March 31. Businesses have 24 weeks to spend the money.
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