Real estate companies received about 3 percent of the $342 billion in loans approved through the federal Paycheck Protection Program, according to new figures released by the U.S. Small Business Administration.
Companies designated under the category “real estate, rental, and leasing” received $10.7 billion in loan approvals, the data show. That money was spread across nearly 80,000 companies in the category — an average of about $134,000 each.
In contrast, the construction industry received the largest share of loans, about 13 percent, according to the report, which documented approvals through April 16, 2020. Just under 178,000 construction firms were approved for nearly $45 billion in loans, or about $253,000 apiece.
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New York and California, the two biggest economic engines in the U.S., may have reason to feel short-changed by the program. An analysis by Evercore cited by Bloomberg noted that the loans issued to New York companies covered only 40 percent of eligible payroll, and the loans to California companies covered just 38 percent of eligible payroll. In contrast, loans issued to firms in Nebraska and North Dakota cover 82 percent and 80 percent of payroll, respectively.
The $349 billion Paycheck Protection Program provides loans up to $10 million to cover rent, mortgage interest, utilities and payroll. According to the National Association of Realtors, lost commissions count as payroll.
On Thursday, the SBA said that funding has run out and it has stopped accepting applications for the two programs, created by Congress to help small firms survive the coronavirus pandemic. Exhaustion of the funds has many real estate firms worried they will be left in the lurch.
Congress is mulling injecting a further $250 billion into PPP, which many in the real estate industry see as their primary support vehicle in the $2 trillion federal stimulus known as the CARES Act, which was passed at the end of March to help the American economy recover.