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Five takeaways from Maryland’s $10 billion coronavirus business loan payout

The U.S. Small Business Administration and Treasury Department released data on Monday regarding its $521 billion Paycheck Protection Program, providing insight into which Maryland businesses took part in the $10 billion in loans paid out to offset losses stemming from the ongoing coronavirus pandemic.

From the top industry benefactors to the reserve of money remaining, here are the main takeaways.

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Restaurants, doctors offices top industries in loan payout

In Maryland, full-service restaurants were the biggest beneficiaries of the Paycheck Protection Program. The industry received at least $244,314,283 in loans from the program, according to federal data. Maryland has allowed restaurants to reopen for outdoor dining, as well as indoor dining at reduced capacities.

Offices for physicians, lawyers and dentists rounded out the top of the list. Physicians’ offices received at least $201,429,151 in loans, while offices for lawyers and dentists received at least $149,477,140 and $140,696,481, respectively.

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These numbers contrast with nationwide figures. Nationally, the healthcare industry was the top recipient of the loan payments, along with professional, scientific and technical services.

Small loans make up the bulk of payouts

Consistent with nationwide figures, small businesses in Maryland received the majority of the state’s loan payments. Of the 81,315 loans approved to Maryland businesses and nonprofits, more than 68,000 were small loan recipients of less than $150,000. That’s approximately 83% of the loan payouts. In the United States, 86% of loans awarded were for less than $150,000, and the average award was $107,000. The federal government omitted the business names and addresses of borrowers who received less than $150,000.

Conversely, 68 businesses in Maryland were approved for the top loan payment of $5 million to $10 million. Hogan Companies, an Annapolis-based real estate group founded by Maryland Gov. Larry Hogan, received a loan in the $150,000 to $350,000 range, according to the federal data. The Republican stepped aside after he was elected and the business is now run by his brother, Timothy Hogan.

While business remained closed because of Maryland’s outbreak, Hogan referenced his previous experience as a small-business owner on multiple occasions to explain his commitment to reopen the economy.

Thousands of jobs retained

As part of the Paycheck Protection Program, loans can be forgiven if used for certain purposes, such as payroll. 938,434 jobs in Maryland were retained due to the loan payments and about 75% of the state’s small business payroll has been supported by the program, according to federal data.

Hundreds of thousands of Marylanders have filed for unemployment as businesses were closed to limit the spread of the novel coronavirus. Maryland lost almost 21,000 jobs in March after Larry Hogan announced a state of emergency and ordered non-essential businesses to shutter operations.

As the state has continued its reopening plan, jobs have returned, but the state’s unemployment rate has sat at 3.8% for the last three months, according to the U.S. Labor Department.

Big private school payout

While nonprofit organizations typically aren’t eligible to apply for Small Business Administration loans, they were permitted to receive a PPP loan. Nearly 3,500 nonprofit organizations took advantage, particularly religious organizations and private schools.

At least $122,010,132 in loans were doled out to religious organizations. McDonogh School topped the list of schools, receiving loans between $5 million to $10 million. Baltimore-area institutions Gilman School, Garrison Forest School and Friends School of Baltimore also received loans in the range of $2 million to $5 million.

Uncertainty looms regarding the potential of in-person classes for the fall. Several school leaders have said classes in the fall will consist of a hybrid schedule of in-person meetings and online classes.

There’s still money left to receive

While the federal government has given out over $500 billion dollars to businesses small and large, about $131 billion remains. The deadline to apply the payment program has been extended to Aug. 8. Maryland hasn’t seen any hitches to its reopening plan, with cases remaining steady and hospitalizations declining. But businesses are still reeling from the impact of multiple months of the shutdown, followed by reduced earnings due to capacity restrictions.

Businesses operated by minorities have also reported struggles in accessing money from the Paycheck Protection Program. According to a May study from the Global Strategy Group, only 12% of Black and Latino business owners who applied for PPP loans reported receiving assistance, compared to 38% of all U.S. small businesses.

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An overwhelming majority of businesses in the state that received a loan did not report the race or ethnicity of the owner but in 2018 a study showed Maryland had the highest per capita rate of minority and women business owners in the United States.

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