Rural States Have Received More PPP Loans So Far

The Paycheck Protection Program (PPP) has now been open for three weeks, and small business owners all over the country have applied. However, according to data on the first two weeks of the program released by the Small Business Administration (SBA), some states have received more of the loans than others: rural states with smaller populations. Here’s what you need to know about the trend.

Agricultural Businesses in Rural States Have An Early Lead in Funding

According to an analysis of the SBA’s data from the Washington Post, four states have received more than twice the amount of loans that they should have based on their payroll data (the number of registered businesses in the state). All four are rural, largely white states: Nebraska, Oklahoma, Wyoming and North Dakota. Overall, agricultural businesses have accounted for 15% of PPP loans in 2021, as compared to only 3% in 2020.

This distribution pattern is similar to the first round of funding, when rural red states received more funding per capita than blue, coastal states. During this round of funding the SBA staggered applications to favor community financial institutions and help minority-owned businesses access funds, but it's clear that equity issues remain.

Agricultural Organizations Lobbied to Change PPP Rules

There are two possibilities as to why rural states have received more in funding.

The first is that businesses in rural areas are more likely to have a close relationship with a local bank or community financial institution that could handle their application for them. In fact, in some small towns, lenders may have reached out to business owners themselves to help arrange applications. Data shows that minority-owned businesses, especially those in low-income, urban areas, are less likely than their peers to have access to financing and a relationship with a bank.

The second reason that rural businesses may be receiving more funding is because the rules of the PPP have changed to allow some agricultural businesses to apply who weren’t eligible during the first round—but not urban businesses.

The Nebraska Farm Bureau, along with some other agricultural lobby groups, successfully campaigned Congress to allow farmers with no employees to apply for the PPP, even if they didn’t earn a net profit in 2019. This is a special provision for farmers, and other self-employed people are not eligible for the PPP if they didn’t earn a profit in 2019. This change has opened up the PPP to many more farmers, but not other sole proprietors.

Can Other States Still Receive PPP Funding?

The good news for those in other states is that the second round of PPP funding is still in the early stages, and most of the money hasn’t been distributed yet. Of the $284 billion allocated to the program, only $35 billion was disbursed in the program’s first two weeks (through January 24). In the first round of funding, $349 billion had already been distributed in the first two weeks.

PPP applications are open until March 31, so if you haven’t applied yet you still have time. Wherever you are in the country, we can help you apply for the PPP. You can even apply through one of our partners, like Bluevine or Credibly, who can let you know if you are eligible for funding.

We also have trackers available on the Skip app for stimulus programs like stimulus checks and EIDL grants along with the latest government news. If you’re looking for more funding or alternatives to the PPP, you can also get early access and exclusive information on grants and loans through Skip Plus.