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13% of Northern Virginia small businesses received PPP loans, report finds

Loan amounts in region exceeded national averages

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As the Small Business Administration prepares to roll out the second round of its Paycheck Protection Program, a new report found that 13% of small businesses in Northern Virginia received loans in the first iteration last spring, higher than the national average of 9%.

The Northern Virginia Regional Commission, a cooperative of local governments, reported last week that 40,743 businesses in the region received loans during the first round of the program, known as PPP, which ran from April through August.  The total amount loaned to businesses in the region was over $5.5 billion, with an average loan amount of about $135,100, 34% above the national average.

The program, part of the CARES Act, was designed to help small businesses keep employees on payroll even if they were forced to close or reduce operations during the first stages of the COVID-19 pandemic. The loans are forgivable as long as a certain percentage of the loan amount was used for payroll and as long as jobs or salaries were not reduced beyond a certain amount.

In the second round of the program, passed by Congress and signed by President Donald Trump this week as part of a $900 billion COVID stimulus package, businesses must demonstrate a revenue loss of at least 25% in one quarter of 2020 compared with the same quarter in 2019 to qualify.  

Because forgiveness applications under the first round of the program are still being processed, determining how many jobs were retained in the region is unknown, the regional commission said.  Northern Virginia had an estimated 1.4 million jobs in small businesses with fewer than 500 employees. 

Bob Lazaro, executive director of the commission, said that while the PPP program was effective, localities in the area also used CARES Act money to provide grants and other support to small businesses in their jurisdictions.

“What the local governments did was far more targeted and helped a number of those who didn’t get PPP loans,” Lazaro said.

Lazaro said he was glad to see that the second round of the PPP includes some money set aside for minority businesses that may not have traditional banking relationships, and he noted that the rent assistance included in the stimulus package will be helpful also.

“All of that is going to be necessary until life gets back to normal, whenever that is,” he added.

The regional commission found that 89% of the loans in Northern Virginia under the first PPP were for $250,000 or less, but they accounted for just 30% of the total funds, or $1.65 billion.  The remaining $3.85 billion went to 11% of the businesses that likely have larger payrolls.  In the second round of the program, only businesses with fewer than 300 employees will qualify, and publicly traded companies are excluded.

The report is based on detailed data about the first round of loans released by the SBA on Dec. 2.  The regional commission prepared a dashboard to break down the loan details by locality and by industry as well as to help identify how many loans went to minority communities.

The commission said that of the region’s 520 Census tracts, 216, or 42%, are majority-minority.  Those majority-minority tracts contained 45% of businesses receiving loans and 46% of the total loaned amount in Northern Virginia.

“What is not known from the PPP data is how many of the loans went to minority business owners,” the report states. “However, similar to the nation, the most cash-strapped minority business owners are the ones that likely did not receive loans in our region.”

Similarly, the number of loans and loan amounts that went to businesses in Census tracts with a high concentration of foreign-born residents generally matched the percentage of those Census tracts overall, but it’s not clear how many loans actually went to immigrant business owners. Of all entrepreneurs in Northern Virginia, 42.5% are immigrants, the NVRC said.   

Editor's note: Rappahannock Media LLC, which publishes InsideNoVa, received a PPP loan in the spring.  However, it is not included in this analysis because the company is based in Rappahannock County.

PPP loans by locality in Northern Virginia

SOURCE: Northern Virginia Regional Commission analysis of data released by the Small Business Administration. 

Locality Total Loans Total Loan Amount Average Loan Amount
Fairfax County 19,253 $2,873,000,000 $149,223
Loudoun County 7,259 $835,400,000 $115,085
Prince William County 5,067 $505,400,000 $99,743
Arlington County 3,365 $526,700,000 $156,523
Alexandria 2,935 $427,200,000 $145,554
Fairfax City 1,264 $148,100,000 $117,168
Manassas 816 $94,600,000 $115,931
Falls Church 584 $68,300,000 $116,952
Manassas Park 200 $25,800,000 $129,000
TOTALS 40,743 $5,504,500,000 $135,103

(2) comments

covid2021

Thats too bad. There are some readers of this blog that want small businesses to fail and think covid is their fault and they are getting what they deserve.

Iwouldntgiveabean

There are some readers of this blog who dont recognize socialism.

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