PPP: How is Maine Faring?

Originally enacted on March 27, the Paycheck Protection Program (PPP) offers loan support and (potentially) loan forgiveness to qualifying small businesses – generally defined as those with not more than 500 employees. According to the U.S. Census Bureau, just under half of all working Americans are employed by businesses of that size.

Protection and maintenance of headcount and wage rates are the key objectives of the PPP program. By offering payroll-based loans that carry the opportunity for forgiveness, the program seeks to encourage small business owners to hang onto employees despite a palm-sweating array of challenges and uncertainties that virtually all companies face due to COVID-19 and related restrictions on business activity and daily life.

Are you wondering how many local Maine businesses have been able to receive funding under the Paycheck Protection Program? Based on recent data from the Small Business Administration, here are some PPP statistics for each of the New England states:

PPP Loans to New England States – approved through 6/20/20

Two things leap out from the New England statistics: Maine received considerably more loans per 10,000 residents, but in significantly smaller amounts per borrower. This suggests that Maine small businesses have taken good advantage of the program but also that Maine, on average, has smaller payrolls per qualifying applicant than the other New England states.

With recent changes in the program due to the PPP Flexibility Act, loan forgiveness will mostly be a function of whether the business has a smaller average headcount compared to the first half of 2019 and compared to mid-February 2020, and whether the business will be able to restore its mid-February 2020 headcount by the end of 2020. It remains to be seen whether Maine small businesses achieve similar levels of forgiveness compared to businesses in other New England states.