Press Release

October 1, 2021
GAO Report Confirms Cardin Policies Increased Equity and Fairness in Paycheck Protection Program

WASHINGTON – U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) released a statement today on a recent report issued by the Government Accountability Office (GAO). The report found that changes to the Paycheck Protection Program (PPP) implemented by Congress and the U.S. Small Business Administration (SBA) successfully increased access to PPP loans for underserved small businesses.

“The GAO’s report confirms that the changes enacted in the bipartisan Economic Aid Act and the American Rescue Plan made the Paycheck Protection Program a more equitable program and got loans into the hands of historically underserved businesses,” Cardin said. “Thanks to the policies enacted by Congress, the SBA was able to help America’s underserved small businesses weather the economic hardships brought by the COVID-19 pandemic.

“This report is proof that through thoughtful, concerted efforts, it is possible to bridge the historical gaps that prevent underserved entrepreneurs from starting and growing small businesses. The report also underscores the urgent need for the $25 billion investment in small businesses that is included in the Build Back Better budget, which implements lessons learned during the pandemic. I am looking forward to further analyses that will provide an even deeper understanding of how these programs work, who they serve, and why they are worth investing in, so Congress can continue improving our federal small business programs to make them fairer and more equitable.”

Cardin has been a lead negotiator of Congress’ small business relief efforts during the COVID-19 pandemic and has led efforts to ensure that funds are distributed equitably. Cardin helped establish PPP through the CARES Act and drafted a provision with Senator Jeanne Shaheen (D-N.H.) that required the SBA to issue guidance to financial institutions participating in PPP to prioritize loans for underserved small businesses. In April 2020, Cardin secured a $60 billion set-aside for smaller lending institutions participating in PPP, such as credit unions, community banks, Community Development Financial Institutions, and Minority Depository Institutions that better reach underserved businesses. In the bipartisan Economic Aid Act passed by Congress in December, Cardin also secured an additional $30 billion set aside for community lenders and $35 billion for borrowers who were unable to apply for an initial PPP loan.

The GAO’s report found that from January 11, 2021 through the end of the PPP on May 31, 2021, the number of PPP loans made to businesses in traditionally underserved counties was proportionate to their representation in the overall small business community. In the report, the GAO specifically credits the equitable success to the changes Congress and SBA made to the program.

Despite initial access challenges, the GAO concluded that PPP loan disbursement in high-minority counties exceeded their relative share of small businesses. The report also found that counties with large shares of women-owned businesses reached their share of small businesses by the program’s end. At the conclusion of the program, businesses in high-minority counties received 50% of all PPP loans and account for 47% of all small businesses nationwide. Similarly, businesses in counties with large shares of women-owned businesses accounted for 16% of PPP loans and represent 16% of small businesses. In addition, the share of PPP loans to businesses in counties with large shares of veteran-owned businesses was generally commensurate with the share of small businesses in those counties.