CARES ActTheAnalyzing America's $2 Trillion Stimulus Package and Investing the Motivations and Results of the PPP Loan Program
Significant controversy surrounds the program. In December 2020, the Department of Justice reported 90 individuals were charged for fraudulent use of funds, totaling $250 million. The loans, which were intended for small business, were actually approved for 450 public companies. Furthermore, the methods of approval are
shrouded in mystery. In an effort to be transparent, the SBA has released information about loan recipients. Conveniently, the SBA has released information of all recipients. Detailed information was released for 661,218 recipients who have received a PPP loan in excess of $150,000. These recipients are the central point of this research.
This research sought to answer two primary questions: how did the SBA determine which loans, and therefore which industries are approved, and did the industries most affected by the pandemic receive the most in PPP loans, as intended by Congress? It was determined that, generally, PPP Loans were approved on the basis of employment percentages relative to the individual state. Furthermore, in general, the loans approved were approved fairly, with respect to the size of the industry. The loans, when adjusted for GDP and Employment factors, yielded a clear ranking that prioritized vulnerable industries first.
However, significant questions remain. The effectiveness of the PPP has been hindered by unclear incentives and negative outcomes, characterized by a government program that has essentially been rushed into service. Furthermore, limitations of available data to regress and compare the SBA's approved loans are not representative of small business.]]>autMaglanoc, JulianthsKenchington, DaviddgcCassidy, NancyctbDepartment of FinancectbDean, W.P. Carey School of BusinessctbSchool of AccountancyctbBarrett, The Honors Collegeenghttps://hdl.handle.net/2286/R.I.63702150 pages116186383671628716197147994jmaglanoIn Copyright2021-05TaxCARES ActAccountingLawFinance