About $4 billion in taxpayer-funded COVID-19 loans created to save jobs at the height of the pandemic's first wave in April went to thousands of businesses and nonprofits in Pennsylvania, New Jersey and Delaware that either don't have any employees or didn't say how many staff would be saved by the money.
An NBC analysis of newly released data shows that none of those 6,910 organizations provided information to the Paycheck Protection Program that shows they saved any jobs.
Those entities either reported having no employees at all or left blank an entry on the PPP application form where they were supposed to fill out the number of jobs to be saved, according to the analysis, which was conducted after NBC and several other news organizations sued the Trump administration to release the data.
Businesses who received the PPP loans are required to use at least 60% of the federal money they receive on employee payroll in order to have the loan forgiven. Otherwise, the loan must be repaid at a low interest rate. It is unclear when or how that requirement will be enforced.
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“I think that’s the key issue with this program," said Caroline Ciccone, of the nonpartisan watchdog, Accountable.us. "It was billed as a way to keep people on payroll, but really what it was, was a cash infusion for anyone who had a lawyer or accountant who told them to apply for the program.”
Overall, nationally, the PPP loans totaled $521 billion and were approved by Congress as part of the $2 trillion CARES Act, the stimulus package initiated to help prop up the economy during the initial wave of the COVID-19 pandemic.
All businesses and nonprofits with less than 500 employees were able to apply for a loan of up to $10 million. The loans were seen as a lifeline for millions of jobs because the federal government will forgive them if companies follow certain criteria in how the money is spent.
NBC10 previously reported that the largest share of billions of dollars in forgivable federal loans handed out in Pennsylvania, New Jersey and Delaware amid the first wave of the COVID-19 pandemic didn't go to local restaurants and bars, or health providers and cultural institutions.
The sector that received the most, by far, is made up of white-collar businesses like law firms, research companies and technology consultants, according to an initial batch of federal data released in July and analyzed by NBC Owned Television Stations.
NBC10 also reported in July that numerous organizations failed to report saving any jobs in their applications for the loans, but the magnitude of the issue could not be quantified because the Trump administration had only previously released data for companies that received at least $150,000.
The new data identifies hundreds of thousands of companies and nonprofits that received less than $150,000, bringing to light the full picture of how many entities failed to clarify the number of jobs saved.
“It was over half a trillion dollars in taxpayer money going to these borrowers, and the taxpayers and the public at large have a fundamental right to know how that money is being spent," NBC attorney Alex Ziccardi said of the data released following the lawsuit by news organizations.
Exactly how many jobs were saved by the PPP loans could take years to determine, if ever.
The U.S. Treasury Department and Small Business Administration claim 51 million jobs were saved, but nonpartisan economists have said that the number is about 14 million.
NBC10 previously grouped businesses that received PPP loans by zip code across the entire Philadelphia region. Some of the areas with the highest number of loans are in the Philadelphia suburbs and central New Jersey.
Thousands of companies in Pennsylvania and New Jersey that are part of what is officially described by the federal government as the "professional, scientific and technical services" sector received roughly $7 billion in forgivable PPP loans.
That amount far exceeds any of the other sectors of the economy. Here is a look at the breakdown by state:
Across the country, hundreds of thousands of small businesses, defined as having less than 500 employees, received federal PPP loans in April and May through the federal stimulus in response to the pandemic.
In total, companies self-reported that the PPP loans would save more than 2 million jobs in Pennsylvania, New Jersey and Delaware, according to the federal data provided by the U.S. Treasury and Small Business Administration.
Uncertainty in the data so soon after the program was created isn't surprising, according to Samuel Rosen, an assistant professor of finance at Temple University's Fox School of Business.
Rosen, who has co-authored an analysis of public companies that received the PPP loans, said it will take months, if not years, to determine the full impact of such a massive government lending program.
"There isn’t a modern equivalent to this type of borrowing program," Rosen said.
"I wouldn’t be surprised if there is a lot of data integrity issues or problems with the reporting," he added.
