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Paycheck Protection Program deemed a success in region

by Andrew Moreau | July 4, 2021 at 2:07 a.m.

The Federal Reserve Bank says the recently ended Paycheck Protection Program was widely successful in helping small businesses despite a slow start and criticisms about how the program initially handed out loans.

The report, issued last week by the Fed's St. Louis branch, which includes Arkansas, noted that "early indications are that [PPP] programs operated as designed and supported the nation's small-business infrastructure during a time of great uncertainty and high unemployment."

The program began in March 2020 under President Donald Trump and was part of the Coronavirus Aid, Relief, and Economic Security Act. As the pandemic continued to ravage the economy throughout the year, the loan initiative was extended two other times.

The PPP was set up so banks and other financial providers could help small businesses receive forgivable loans through the U.S. Small Business Administration. The goal was to give businesses -- many of which were forced to shut down to prevent the spread of the virus -- the funds needed to pay rent, utilities and, most importantly, salaries to keep workers on their payrolls.

"While some bankers and borrowers have said that the program's implementation was a little rocky, and uncertainties about the number of jobs 'saved' and loan forgiveness remain, the PPP is widely considered a success," the Fed report notes.

Initially, loan access was limited to companies with fewer than 500 employees, including contract workers. Loans covered up to two months of payroll and were capped at $10 million.

The program was adjusted several times as federal administrators took steps to try to get money into the hands of businesses that needed it most -- small companies operating in financially underserved rural areas.

For example, the program at first allowed businesses to allocate 75% of their PPP loans to salaries to qualify for loan forgiveness. As the program was extended, that threshold was reduced to 60%.

And companies were given more time to spend the funds. Moreover, by the time the third round of funding was approved in December 2020, only companies with fewer than 300 employees were allowed to apply for PPP loans.

Additionally, funds were set aside for banks and other Community Development Financial Institutions that specialized in serving minority-owned and rural businesses located in low- and moderate-income communities.

As the program was refined, it became more successful in reaching small businesses with the greatest need, the Fed found.

The vast majority of loans approved this year went to businesses with fewer than 10 employees, the report says.

The hardest-hit sectors, hospitality and food-services businesses, gobbled up the largest share of PPP loan dollars at 15%, followed by construction at 12%, health care and social assistance at 10%, and professional, scientific and technical services, also at 10%.

About 90% of the PPP loans approved in 2021 were for $50,000 or less, making up almost one-third of all loan dollars extended this year, according to the Fed. The average size of a PPP loan approved in 2021 was $42,000, compared with $206,000 in the program's first round.

Loans ended on May 31 and the program is credited with helping save more than 7 million businesses, according to the SBA. The agency also reported that about $800 billion in loans were approved -- all of them completely forgivable -- over the program's three rounds of funding.


The Conductor, an entrepreneurial support organization in Conway, is accepting applications for its fifth cohort in the 10X Growth Accelerator program. Applications are due July 5 for the cohort that begins Aug. 10.

The 14-week accelerator initiative assists established high-potential technology and tech-enabled ventures that are based in Arkansas. Participants should be growth-oriented start-ups with annual average revenue from $100,000 to $10 million.

Alumni companies report measurable growth in revenue, sales and jobs created after starting the program, Conductor officials say. Survey results show that 100% of alumni companies said that the 10X Growth Accelerator is a valuable program for scalable companies within the state.


State and federal economic development experts are inviting rural small-business owners to a conference Friday to learn more about creating jobs in their communities.

The Southwest Arkansas Rural Business Development Conference will be held virtually via Zoom, from 8:30 a.m.-12:30 p.m. The initiative will provide rural residents with skills and tools to expand their small businesses.

For participants without computer access, the conference will also be held remotely at the Nevada County Library, 121 W. Main St. in Prescott.

With a theme of "Using Existing Resources and Creating Innovative Approaches to Rebuild Rural Arkansas," the conference will include 20 private, state, federal and nonprofit organizations. Their goal is to give entrepreneurs and small businesses the resources to start and expand their operations.

Topics will include building effective business relationships, securing the right capital and how to sell goods and services to the government,

Space is limited. Registration is available by calling the Arkansas Human Development Corp. at (800) 482-7641 or (501) 374-1103, ext. 10, or online at

The event is funded by the Arkansas Department of Workforce Services, Arkansas Human Development Corp., Arkansas Small Business and Technology Development Center and the U.S. Department of Agriculture.


Need to polish your business writing skills?

The Arkansas Community Bankers association is providing four opportunities Wednesday afternoon to help add a little sparkle to business reports and communications.

Ninety-minute sessions, conducted virtually, will be held beginning on the hour from noon to 3 p.m. The sessions are designed to help all staff, from the entry-level employee who wants to polish emails to the C-suite executive hoping to persuade key decision-makers, both internally and externally.

The sessions will help participants deliver complex information clearly and with precision as they learn how to use appropriate tone and language, along with correct grammar, for their intended audiences.

Participants will get a hands-on review of their writing skills.

Within two weeks after viewing the live or recorded webinar, each participant can submit a written sample (five pages maximum) to a professional writing coach for review, critique and comments.

More information is available at

Column ideas or recommendations? Thoughts or musings that need pursuing? Contact me at or at (501) 378-3567.

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