NEWARK, NJ — New Jersey-specific data regarding the distribution of loans made under the Payroll Protection Program were released by the United States Small Business Administration and the Treasury Department, showing corporations in Newark were the primary beneficiaries of the federal relief line.
The $521 billion program, part of the bipartisan CARES packages, provides direct incentives for employers to retain workers on their payrolls. Statewide, 531,360 jobs were salvaged through $4.5 billion in PPP loans.
According to the data, 2,187 businesses received loans totaling $77.3 million to support 9,573 jobs in Newark, an average of $8,083 per job. Data shows that more than 39% of those loans were given to C-type corporations, mostly in the manufacturing and transportation sectors.
Limited Liability Companies (LLCs), a common designation for community-owned businesses, received about 34% of the SBA loans distributed in Newark across mixed industries. Subchapter-S corporations received 11% of Newark’s PPP share, and nonprofits came in at roughly 6%.
Starting early into the PPP’s execution, lawmakers, small business owners and working Americans admonished the Trump administration and Treasury Secretary Steve Mnuchin for giving more than $1 billion to publicly traded companies. While the names of the businesses and corporations in Newark that received loans are not disclosed, many struggling entrepreneurs in Newark have expressed frustration with their inability to access aid.
Isabelle Livingston, owner of Closet Savvy Consignment on Maiden Lane, told TAPinto Newark she received nothing from the PPP. Others, particularly Black-owned businesses, echoed her experience and lamented the banking and records requirements required for the applications, which many small proprietors don’t have.
“It was really disheartening, with the PPP especially, just to see that much like everything else in life, size matters. I really would hate to close, because my story really resonates with so many people here in this city,” Livingston said. “I grew up here, my mother was on social services, living in housing projects with very little education, and I was able to get this establishment in downtown Newark that served as a beacon of hope for people who look like me.”
A recent study from the National Community Reinvestment Coalition shows that lending discrimination played a role in the distribution of PPP funds. Researchers matched pairs of Black and white applicants with similar credit characteristics to apply to the program, finding that 27 out of 63 white applications received better treatment and results from lenders.
The PPP does not require applicants to submit demographic information, with only 23% of the national data available in the loan records including any information on gender or race. The NRDC calls the PPP”s attempts to claim it is reinvigorating certain communities baseless.
The NRDC also released analysis of the data released by the Treasury Department, calling it essentially “useless” in determining how the funds are uplifting vulnerable populations.
“The lack of data creates a gap in our understanding of PPP lending and presents a challenge for understanding the impact of this program on communities traditionally excluded from access to business capital,” researchers Jason Richardson and Jad Edlebi said. “However, due to the size of the program, even this offers a glimpse of the challenges faced by women and minorities who need access to business credit.”