The Paycheck Protection Program (PPP), enacted to help small- to medium-sized businesses (SMBs) retain employees during the pandemic, was able to save around 2.3 million jobs through early June, Reuters reported, citing a paper co-written by economists at the Federal Reserve Board of Governors, Massachusetts Institute of Technology and ADP Research Institute.
The paper looked at hiring trends for companies qualified for the program versus those that did not qualify due to being too large, with hiring at eligible companies rising after the program was implemented, Reuters reported. According to the paper, the PPP boosted employment at qualifying companies by around 2 percent to 4.5 percent.
However, the report noted that it's hard to say how many employers would have kept their employees even without the PPP funds.
The issue that has come about since the PPP funds went out is how much aid went to companies that didn't need it. Many lenders cut back on early applications for existing customers, making it hard for some of the smallest businesses to access money, including minority-owned ones hit the hardest by the pandemic, Reuters reported.
Treasury Secretary Steven Mnuchin has said future financial aid programs should focus on those who need the money the most, with a more targeted approach. He said he hoped governmental officials would prioritize those who were in the most need, although he didn't mean that those smaller businesses were the only ones afflicted by the pandemic.
U.S. Small Business Administration (SBA) Administrator Jovita Carranza said the program had been intended to bolster particularly disadvantaged SMBs, in a way that had also helped small credit unions and financial institutions that needed the work.
Lawmakers are still hashing out a new stimulus package, with several details still in flux, including unemployment benefits, school reopenings, direct checks and rent and mortgage aid, PYMNTS reported.