The paycheck protection program (PPP) is one of the best things the government has come up with to help businesses.
Many businesses relied on PPP loans to help them pay for different things during the COVID pandemic. Yet, many owners didn’t know how to properly use their funds for growth.
By studying PPP loan data, you can figure out how your business compares to others that received PPP loans. This will help you decide what to spend your money on for growth.
Here are 3 things to know about PPP loan recipients!
1. The Things Businesses Spent Money On
The PPP loan was designed for businesses to continue paying employees during a time in which many struggled to earn money. While you can apply for ERC today, the PPP is a great alternative. However, this wasn’t the only reason businesses applied.
When the paycheck protection program initially launched, many businesses requested enough money to hold out for several months. Yet, other businesses have applied for loans with different intentions. Working capital was the most common use for PPP loans, though many others exist.
2. Working Capital Wasn’t the Only Reason for PPP Loans
Things like equipment, expansion, debt consolidation, marketing, and remodeling are all appropriate things to use PPP funds for. Because of this, many businesses invested in these areas when they were still earning enough to pay their employees.
Depending on the amount provided, a business may have enough to cover both employee payroll and other expenses. This was the case for many small businesses, which received enough to pay employees and do other things with the leftover money.
While many businesses applied for PPP loans to invest in working capital, others prioritized purchasing equipment and expansion. For example, those in the real estate sector focused on purchasing equipment, whereas those in finance prioritized expansion.
3. How Homeowners Affected Businesses
Another thing to note about the paycheck protection program is that there was an increase in home improvement when the COVID pandemic began. This resulted in many home repair businesses seeking PPP loans to ensure they have the right equipment for the demand.
Initially, the housing market had a dramatic decline in demand, allowing people to buy homes at lower interest rates. As time went on, the market began bouncing back and real estate companies started getting PPP loans for working capital.
Today, there aren’t many options for homeowners in the current market, so real estate companies don’t need to rely on loans like they previously did. Home repair companies can expect to get more business and homeowners can demand more money for their properties.
Continue Researching PPP Loan Data
Now that you’ve read this article, you have a better idea of how businesses use PPP loans. We encourage you to continue researching PPP loan data if you’re a recipient and aren’t sure of what to use the funds on.
Check out our other articles for more info on business loan data to save yourself some time.