flexiblefullpage -
billboard - default
interstitial1 - interstitial
catfish1 - bottom
Currently Reading

Construction businesses top one cohort of borrowers under Paycheck Protection Program

Contractors

Construction businesses top one cohort of borrowers under Paycheck Protection Program

The loans saved an estimated 17,500 construction jobs.


By John Caulfield, Senior Editor | July 8, 2020
Lendio faciltated nearly $182 million in loans to contractors.

A network of lenders working with the marketplace Lendio facilitated nearly $182 million in Paycheck Protection Program loans to construction companies. Images: Lendio

Earlier this week the Small Business Administration and U.S. Treasury Department released a list of recipients from the government’s Paycheck Protection Program (PPP), which so far has allocated $521 billion of the $670 billion approved by Congress under the CARES Act to nearly 659,000 borrowers. The Trump Administration claims that this program has supported 51 million jobs, roughly 84% of whom work for small businesses. 

At presstime, SBA hadn't released exactly how much each entity was approved to borrow. And some recipients—like retail and fast-food chains, millionaire rock bands, and a business venture led by NFL quarterback Tom Brady, who earned $23 million last year—have raised questions about the program’s purpose and vetting process.

But according to Lendio, a small business marketplace, construction led all industries in total volume among the 100,000 PPP loans totaling $8 billion that Lendio facilitated in partnership with 300 lenders between April 3 and June 30.

FIRST LOAN ROUND LEFT SMALL BUSINESSES STRANDED

The PPP program allowed businesses in many sectors to keep their workers employed even if they were shut down by the coronavirus.

 

Lendio and its partners tapped into the $350 billion in relief lending that Congress approved in early May, which went primarily to small businesses and small proprietorships.

When Congress approved the first round of PPP loans, its intention was to provide a life raft to businesses forced to close because of the coronavirus pandemic. Borrowers could receive up to 2.5 times their companies’ monthly payrolls, much of which would be forgiven if they keep their workers employed.

However, small businesses struggled to access the first round of PPP loans, totaling $349 billion, which lasted only two weeks and was gobbled up by relatively few businesses. For the second round, Congress earmarked $30 billion specifically for community banks so they wouldn’t have to compete with larger lenders.

The demand was certainly pressing. Lendio points out that prior to participating in the PPP, it had facilitated $2 billion in business loans since its inception in 2011.

The average PPP loan on the Lendio platform is $73,000, versus the national average of $107,000. During the PPP, 30% of the loans that Lendio facilitated went to businesses in urban areas, 28% in the suburbs, and 39% in rural communities. The Pacific and South Atlantic regions of the country accounted for 45% of Lendio’s PPP loans.

LENDIO FACILITATES $182 MILLION IN LOANS TO CONSTRUCTION BORROWERS

About 45% of the PPP loans that Lendio facilitated were to businesses in the Pacific and South Atlantic regions of the U.S.

 

Of the loans facilitated by Lendio, just under $181.7 million went to businesses in the construction industry, the highest total volume for any sector. Construction was followed by healthcare, restaurants, information media, manufacturing, and retail.

The average loan for construction borrowers was just under $100,000, which ranked fourth by sector, with manufacturing topping this list at $145,568 per loan average.

Lendio estimates that construction borrowers saved 17,500 jobs as a result of the PPP, behind restaurants (31,501 jobs saved), healthcare, and automotive.

ARE MORE LOANS IMMINENT?

Right now, Congress and the White House are debating whether more stimulus is needed, as the coronavirus continues to spread in several areas of the country, with nearly 3.1 confirmed cases of COVID-19 and 133,000 deaths in the U.S., and with hospitalizations rising in 22 states. Some states, cities and towns are reconsidering their plans for reopening their economies.

“Unfortunately, the challenges for small business owners do not end when they receive a PPP loan and great economic uncertainty remains,” writes Lendio. It notes that business owners are now navigating the loan forgiveness process, and others continue to seek financial assistance while operating on thin margins. “As demonstrated throughout the program to date, the need for relief funding is unprecedented and will likely continue as small business owners seek to reopen and rebuild in the coming months.”

Related Stories

Sports and Recreational Facilities | May 23, 2024

The Cincinnati Open will undergo a campus-wide renovation ahead of the expanded 2025 tournament

One of the longest-running tennis tournaments in the country, the Cincinnati Open will add a 2,000-seat stadium, new courts and player center, and more greenspace to create a park-like atmosphere.

Mass Timber | May 22, 2024

3 mass timber architecture innovations

As mass timber construction evolves from the first decade of projects, we're finding an increasing variety of mass timber solutions. Here are three primary examples.

MFPRO+ News | May 21, 2024

Massachusetts governor launches advocacy group to push for more housing

Massachusetts’ Gov. Maura Healey and Lt. Gov. Kim Driscoll have taken the unusual step of setting up a nonprofit to advocate for pro-housing efforts at the local level. One Commonwealth Inc., will work to provide political and financial support for local housing initiatives, a key pillar of the governor’s agenda.

Building Tech | May 21, 2024

In a world first, load-bearing concrete walls built with a 3D printer

A Germany-based construction engineering company says it has constructed the world’s first load-bearing concrete walls built with a 3D printer. Züblin built a new warehouse from a single 3D print for Strabag Baumaschinentechnik International in Stuttgart, Germany using a Putzmeister 3D printer. 

MFPRO+ News | May 20, 2024

Florida condo market roiled by structural safety standards law

A Florida law enacted after the Surfside condo tower collapse is causing turmoil in the condominium market. The law, which requires buildings to meet certain structural safety standards, is forcing condo associations to assess hefty fees to make repairs on older properties. In some cases, the cost per unit runs into six figures.

Mass Timber | May 17, 2024

Charlotte's new multifamily mid-rise will feature exposed mass timber

Construction recently kicked off for Oxbow, a multifamily community in Charlotte’s The Mill District. The $97.8 million project, consisting of 389 rental units and 14,300 sf of commercial space, sits on 4.3 acres that formerly housed four commercial buildings. The street-level retail is designed for boutiques, coffee shops, and other neighborhood services.

Construction Costs | May 16, 2024

New download: BD+C's May 2024 Market Intelligence Report

Building Design+Construction's monthly Market Intelligence Report offers a snapshot of the health of the U.S. building construction industry, including the commercial, multifamily, institutional, and industrial building sectors. This report tracks the latest metrics related to construction spending, demand for design services, contractor backlogs, and material price trends.

K-12 Schools | May 15, 2024

A new Alabama high school supports hands-on, collaborative, and diverse learning

In Gulf Shores, a city on Alabama’s Gulf Coast, a new $137 million high school broke ground in late April and is expected to open in the fall of 2026. Designed by DLR Group and Goodwyn Mills Cawood, the 287,000-sf Gulf Shores High School will offer cutting-edge facilities and hands-on learning opportunities.

Contractors | May 15, 2024

The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of April 2024

Associated Builders and Contractors reported that its Construction Backlog Indicator increased to 8.4 months in April, according to an ABC member survey conducted April 22 to May 6. The reading is down 0.5 months from April 2023, but expanded 0.2 months from the prior month.

Affordable Housing | May 14, 2024

Brooklyn's colorful new affordable housing project includes retail, public spaces

A new affordable housing development located in the fastest growing section of Brooklyn, N.Y., where over half the population lives below the poverty line, transformed a long vacant lot into a community asset. The Van Sinderen Plaza project consists of a newly constructed pair of seven-story buildings totaling 193,665 sf, including 130 affordable units.

boombox1 - default
boombox2 -
native1 -

More In Category



MFPRO+ News

Massachusetts governor launches advocacy group to push for more housing

Massachusetts’ Gov. Maura Healey and Lt. Gov. Kim Driscoll have taken the unusual step of setting up a nonprofit to advocate for pro-housing efforts at the local level. One Commonwealth Inc., will work to provide political and financial support for local housing initiatives, a key pillar of the governor’s agenda.


halfpage1 -

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021