• Juanita Schwartzkopf

How Much Liquidity Did the PPP Facility Pump into the Economy?


Focus Management Group - Payroll Protection Program

As of May 10, 2021 the Payroll Protection Program provided over 10 million PPP loans with a total value of $782 billion. From January 1, 2021 to May 10, 2021 the PPP provided 5.7 million loans with a total value of $260 billion.


Focus Management Group - Payroll Protection Program

The first round PPP loans are moving through the forgiveness process. As of May 9, 2021, of the $521.2 billion dollar value of loans approved in 2020, 49% of the loans

have been forgiven, 16% are under review, and 34% are awaiting forgiveness application. Only 0.15% of the loan volume has not been approved for forgiveness.


Focus Management Group - Payroll Protection Program

The second round PPP loans have provided $58.1 billion of funds to new PPP borrowers and $201.9 billion of funds to borrowers who received first round funds.


Focus Management Group - Payroll Protection Program

Of the 2021 PPP loans, $102.4 billion was made in loan amounts of $100,000 or less to 5.2 million borrowers. The overall average loan size was $45,000.


To consider the impact of this program, if you assume an average employee income level of $50,000 per year, this program would have supported the full salary of 5% of the total US population of 328 million in 2019. Considering the salary earned in a quarter, the PPP program would support 20% of the US population for a quarter.


These are some staggering amounts of liquidity pushing into the economy by the government.


Read more: How to Protect Against Inflation in 2021: A Guide for Commercial Lenders


The impact by state varies. The five states receiving the most funds under the PPP in 2021 were California, New York, Texas, Florida and Illinois, with those five states receiving 41% of the total dollar amount.


Focus Management Group - Payroll Protection Program

The industries that received the most assistance under the 2021 program were accommodation and food services (15%), construction (12%), and health care and social assistance (11%). The next table summarizes the PPP impact by industry.


Focus Management Group - Payroll Protection Program

The overall program amounts have certainly provided much needed liquidity to businesses, and will have financial performance reporting impacts during 2020 and 2021. The performance of individual businesses will need to be evaluated looking toward 2022 and beyond.