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Main PPP lenders [Updated]

In April 2020, the U.S. government launched the historic Paycheck Protection Program (PPP) for banks to provide financial assistance to struggling small businesses amid the COVID-19 pandemic. A staggering $ 659 billion was allocated to the PPP in two separate installments, with first-round funds of $ 349 billion being drawn in less than two weeks. But adoption slowed in the second round, as large companies repaid loans in the wake of public outcry, while complex requirements and obscure loan cancellation guidelines deterred small businesses from applying. As the program closed on August 8, 2020, $ 134 billion had not been drawn.

Banks that were decisive in deploying PPP loans could gain new customers and the goodwill of regulators, as well as a slice of billions in lending fees. Despite the initial missteps, they achieved much of what they set out to do, securing $ 525 billion in much-needed aid for American small businesses. Some banks had problems with their PPP loan applications, funds did not go to the areas that needed it most, and larger loans were favored by several institutions, but most of these problems were mitigated or rectified in the future. the program ends in August. . Now their focus has shifted to processing loan cancellation requests, a task that could be even more difficult than loan approval.

The PPP was more successful in securing funds for hard-hit states during the second tranche, although it had a mixed record in reaching the hardest-hit industrial sectors. In some industries, a greater need for funds was accompanied by a higher supply, such as in health care. But some of the hardest hit industries, like accommodation and food, haven’t gotten the level of relief they needed.

Below are highlights from some of the top PPP-approved lenders:

JPMorgan Chase ($ 29.35 billion on loan)

Chase led the way in terms of total amounts approved, while also achieving a relatively small average loan size. It was the largest distributor, having approved a total of $ 29.35 billion as of August 8. Its average loan amount of $ 104,760 is slightly above the overall program average of $ 101,000 – which is particularly impressive compared to its average loan amount of $ 515,304 in the first tranche P3s.

Bank of America (BofA) ($ 25.56 loaned)

BofA had relatively low shares of PPP loan volume compared to its shares of the US small and medium-sized enterprise (SME) loan market. The bank approved 4.6% of total PPP loan volume, as of June 30, while holding a 9.5% share of the SME lending market, the largest gap among its peers. Still, it’s much narrower than the 8.3 percentage point spread it recorded in the first tranche of the PPP.

BMO Harris ($ 4.84 billion loaned)

BMO Harri had the highest average loan size among major lenders. At $ 219,888, the bank beat its peers KeyBank and M&T Bank, but did a better job reducing its average loan amount compared to the first PPP installment.

Cross River ($ 6.55 billion loaned)

By far the smallest bank among major lenders, New Jersey-based Cross River has managed to approve a whopping 66% of its total assets. It approved $ 6.55 billion in loans with an average loan size of $ 32,960, making it the bank with the smallest average loan size among major lenders. The community bank has expertise in processing low-value loans, and its impressive performance has been supported by its partnerships with fintechs such as Kabbage and QuickBooks.

Wells Fargo ($ 10.60 billion loaned)

After Cross River, Wells Fargo had the second lowest average loan amount of $ 54,501, after approving $ 10.60 billion in loans. It should be noted that the banking giant had been criticized after the first round of PPP for its low participation in the program, while its results brief submitted on May 5 revealed that it was facing class actions, as well as investigations by federal and state government agencies. regarding its PPP lending practices. But it appears the bank has gone to great lengths to allay concerns that it may prioritize larger loan amounts.

Best PPP Lenders

In PPP loans to small businesses—The last of three updates — Insider Intelligence examines how different lenders have successfully implemented PPP. The companies mentioned in the report are: Bank of America, BMO Harris, Citibank, Cross River Bank, JPMorgan Chase, Kabbage, KeyBank, M&T Bank, PayPal, PNC Bank, Truist Bank, US Bank and Wells Fargo.

This report begins by examining the data available on PPP lender approval models and provides information on how loans were distributed among major lenders, geographies and industries at the end of the program on August 8. We assess the overall effectiveness of the program in delivering aid in the United States. small businesses and anticipate potential future initiatives as the pandemic continues.

In its entirety, the report:

  • Combines official data from the Small Business Administration with additional sources, such as company statements and earnings calls, an academic article, and analyst research, to generate insight into how different lenders performed successfully implemented the PPP when it closed on August 8.
  • Reviews PPP loan amount and total fees received by lenders, and examines total funded loans and average loan amounts for major PPP lenders.
  • Provides the main lessons from the analysis of loan figures approved by sector and by geographic area.

Interested in getting the full report? Here’s how to get there:

  1. Join other Insider Intelligence customers who receive this report, along with thousands of other banking forecasts, briefings, charts, and research reports delivered to their inboxes. >> Become a client
  2. Purchase the original May and July update with this report from our store – for the price of a report. >> Buy all three reports here

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