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The Paycheck Protection Program (PPP) in Puerto Rico

A significant part of the CARES act, the coronavirus stimulus package recently passed by Congress, is a program of loans for small businesses affected by the pandemic. Under the Paycheck Protection Program (PPP), a company with fewer than 500 employees can borrow 2.5 times their payroll, with the possibility of having that loan forgiven if they do not lay off workers or reduce their salaries.

The funds are available to any U.S. business, including those located in Puerto Rico. However, comparing the territory with states having similar populations shows that Puerto Rico received fewer loans and less in total dollars. As of April 13, 2020, according to the Small Business Administration, these were the loans issued to states and territories with populations between 3 million and 3.3 million:

  • Puerto Rico received
    1,001 loans
    $319,308,946 in total
    (eligible payroll data unavailable)
  • Nevada received
    4,209 loans
    $1,255,172,600 in total
    42% of eligible payroll
  • Utah received
    12,914 loans
    $2,617,066,864 in total
    66% of eligible payroll
  • Arkansas received
    14,803 loans
    69% of eligible payroll
  • Iowa received
    74% of eligible payroll

It is clear that the funds were not evenly distributed among the states. However, a chart showing the distribution among all five locations makes it clear that Puerto Rico received a disproportionately lower amount of funds.



Is it political?

As Bloomberg reports, some observers have suggested that the uneven distribution of funds is simple: red states get more and blue states get less. On their map showing PPP funding as a percentage of payroll, Utah, Arkansas, and Iowa are all in the upper middle tier of funding. Nevada, with just 42% of eligible payroll funded, is in the lowest tier, along with states like California and New York. Utah, Arkansas, and Iowa are all states that consistently vote Republican in presidential elections, while Nevada votes Democratic.

It also appears that States with lighter COVID-19 restrictions are getting more funds. Arkansas, Iowa, and Utah are all among the few States which did not issues stay at home orders.

Facts like these are causing people to suggest political motivation for the difference, but they could be coincidence. No one has suggested a mechanism that could lead to the type of discrimination being suggested.


Puerto Rico received less — both fewer loans and less money — than any State or the District of Columbia, but more than any of the other territories. All the territories besides Puerto Rico have much smaller populations than any State.

But observers have also noticed that States with strong agricultural industries are getting more funds than other States, but the agricultural industry is not one of the winners.

Construction, manufacturing, technical services, and healthcare all received higher percentages of PPP loans than food service, which received just over 9%. Agriculture, in contrast, received just over 1% of the loans — less than the arts or mining.

Manufacturing is an important industry in Puerto Rico. Nationally, however, more workers are in healthcare and food service than in any of the industries that outdid food service in loans.

It does not appear that Puerto Rico’s lower funding is due to the industries affected in the Island.

So why is Puerto Rico receiving less?

It is not clear why Puerto Rico is receiving less in PPP funding than comparable States. The territory definitely is receiving less. “Puerto Rico today has approximately 1% of the population of the United States, yet it received only 0.17% of all loans by count and 0.19% by amount under the PPP, and it ranked 52 out of 56 jurisdictions (the 50 states, DC and the five territories) in total amount lent,” says the Center for a New Economy. “Small businesses in 21 jurisdictions with less population than Puerto Rico received a larger aggregate amount of PPP loans than Puerto Rico.”

As the next wave of PPP loans becomes available, more of the territory’s businesses may get their applications in.

Update: Puerto Rico has now received 19,961 loans totaling $987.68 million through May 4, 2020.

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