Fact check: No, Wisconsin did not get $0 in small business coronavirus relief funds
The claim: "Wisconsin small businesses are getting $0 while big corps are getting bailouts"
A viral Facebook post claims a federal program designed to help small businesses hasn’t done anything in Wisconsin.
As of early May, almost one in three small businesses reported closing their doors temporarily, and nearly one-fourth said they were within two months or less of closing permanently, according to a survey by MetLife and the U.S. Chamber of Commerce.
The government’s primary response has been the Paycheck Protection Program, which distributed billions in forgivable loans for small businesses to use for primarily payroll, but also mortgages, rent and utilities.
The Facebook post criticizes the PPP’s impact in Wisconsin. A video discusses in general terms how small businesses are struggling, but the headline makes a much more specific claim.
“Under Trump, Wisconsin small businesses are getting $0 while big corps are getting bailouts,” the headline says.
The text beneath this headline clarifies it is referring to the PPP funding.
We found no factual problems with the 15-second video, but the headline gets it wrong.
More:Hundreds of publicly traded companies got more than $1 billion from PPP small-business fund
The PPP was intended as a lifeline to weather the economic fallout of the coronavirus pandemic, but funds disappeared quickly. The first pool of nearly $350 billion was exhausted April 16, with 80% of applicants unable to get funding, the Washington Post reported.
A second round of funding was made available starting May 1. As of May 23, the program had approved 4.4 million loans for a total of nearly $512 billion. The average loan was $115,533.
The loans can be fully forgiven if funds are used for payroll costs, interest on mortgages, rent and utilities. The loans are subject to various requirements, such as recipients using at least 75% of the funds for payroll and maintaining or quickly rehiring employees.
But there has been controversy over who received the funds.
More:House plans to vote on changes to small business loan program to offer more flexibility
Many larger companies have returned funds they received through the program in the wake of public outrage.
More than $1 billion from the first round of funding went to publicly traded companies, the Washington Post reported. And 43 loans went to companies with more than 500 workers.
The headline claims no small businesses in Wisconsin have received funds. That’s false.
As of May 16, Wisconsin businesses had been approved for 78,490 loans for a total of $9.8 billion, according to the SBA. That’s an average of about $125,000 per business.
The next question then, is how we define “small businesses.” It’s a squishy term, but it doesn’t make sense to use a different definition than the program referenced in this post.
The PPP is administered by the Small Business Administration and specifically allows loans for businesses that meet that agency’s definition of a small business — generally 500 or fewer employees.
And there’s no reason to believe this headline is referring to some other cutoff for “small business,” since we don’t have any data to examine that.
The SBA hasn’t released data on the size of the firms receiving loans. Some critics have used the loan size — many top $1 million — as a proxy for business size, but the SBA also hasn’t released data on loan size broken down by state.
The SBA does detail loan size at the national level. We see smaller loans are more common, but larger loans take a much bigger slice of the pie overall. Nearly 80% of the PPP loans through May 16 were for $100,000 or less, but they accounted for only 19% of the funds distributed.
On the flip side, about 3% of all loans were more than $1 million, and those accounted for about 36% of all funding.
Our ruling: False headline
We rate this claim as a FALSE HEADLINE based on our research. Larger, publicly-traded corporations have indeed received funds from the PPP. But we don’t have any state-specific data on how big the businesses getting the loans actually are, or even how many loans are on the larger or smaller ends of the scale. It’s false to claim Wisconsin small businesses are getting $0 when the PPP program has paid out $9.8 billion to tens of thousands of businesses in the state.
Our fact-check sources:
- U.S. Chamber of Commerce, Small Business Coronavirus Impact Poll, May 5, 2020
- Washington Post, Public companies received $1 billion in stimulus funds meant for small businesses, May 1, 2020
- U.S. Small Business Administration, Paycheck Protection Program, accessed May 24, 2020
- Politico, As deadline looms, companies rush to return small business funds, May 17, 2020
- U.S. Small Business Administration, Paycheck Protection Program (PPP) Report, May 16, 2020
- Email exchange with Carol Chastang, SBA spokeswoman, May 20-22, 2020
Contact Eric Litke at (414) 225-5061 or firstname.lastname@example.org. Follow him on Twitter at @ericlitke.
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Our fact check work is supported in part by a grant from Facebook.