One year after Collins helped launch PPP, success but also caution
Exactly one year since plans began for the Paycheck Protection Program, the federal initiative to keep workers working amid the pandemic has resulted in 39,500 forgivable loans totaling more than $3 billion for Maine small businesses.
But the program, widely regarded as a success, is also drawing a note of caution from a federal watchdog agency.
The PPP provided nearly $2.3 billion last year to 28,000 Maine businesses, according to a news release Thursday from U.S. Sen. Susan Collins, R-Maine. Since reopening in January, the PPP has authorized another 11,200 loans totaling $741 million for Maine businesses.
The new program allows businesses that benefited from the initial financing to take a "second draw" and those that didn't get one the first time around to apply. It also has additional benefits for restaurant and lodging owners, expands uses of the loan proceeds, and makes other changes.
Collins and U.S. Sen. Marco Rubio, R-Fla., drafted plans for the PPP and unveiled them March 18, 2020, as COVID-19 raged and had just been declared a pandemic by the World Health Organization.
The plans by Collins and Rubio ultimately became the PPP, which they co-authored along with U.S. Sens. Ben Cardin, D-Md., and Jeanne Shaheen, D-N.H.
On Thursday, the program’s one-year anniversary, Collins touted the results.
“Our legislation, now the Paycheck Protection Program, helped prevent millions of small businesses from going under and tens of millions of Americans from losing their jobs,” she said in the release. “The PPP has been a resounding success.”
In Maine, recipients have ranged from businesses getting as little as a few hundred dollars to nearly two dozen companies that each obtained over $5 million in the early days of the pandemic.
Despite the results, the program has also drawn some criticism.
The federal Government Accountability Office recently placed the PPP on its High-Risk List, a biannual roster of programs and operations that are at elevated danger of fraud, waste, abuse and mismanagement.
In a report issued last month, the office criticized the PPP as well as federal Economic Injury Disaster Loans for their management by the U.S. Small Business Administration.
“Although [the PPP and EIDL] created the risk of hundreds of millions of dollars in improper payments, including those resulting from fraud, SBA lacks finalized plans to oversee the two programs," the report reads. “Further, as we have reported multiple times, SBA’s failures to provide data and documentation on a timely basis for PPP and EIDL have impeded efforts to ensure transparency and accountability for the programs.”
The emergency loan initiative is one of three dozen federal functions deemed at high risk by the GAO, and one of only two that were added this year. The complete list and the GAO's report can be found here.
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