During the Covid-19 pandemic, Congress authorized the Paycheck Protection Program (PPP) loan program to keep America’s workforce employed during the health crisis. The PPP loan program was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The program, administered by the Small Business Administration (SBA), ended on May 31, 2021. The SBA offered two draws of funds during the program. The loans were “designed to provide a direct incentive for small businesses to keep their workforce on payroll” during the crisis. The loan could be used “to help fund payroll costs, including benefits,” as well as “to pay for mortgage interest, rent, utilities,” and other Covid-19 “related expenses.”
Critical to the loan program was that the loan would be forgiven “if all employee retention criteria” were met, or funds were “used for eligible expenses.” The loans issued before June 5, 2020 matured two years after they were issued to the borrower. Those issued after June 5, matured five years later. The loans carried an interest rate of 1%. Generally, any business, including individuals working as sole proprietors, qualified for the relief funds.
The SBA offered a second draw to businesses that had received a first PPP loan draw. Under both draws, borrowers could borrow up to 2.5 times the amount of their average 2019 or 2020 payroll costs, whichever were higher. In the second draw, in addition to having received the first draw, a business owner had to demonstrate “at least a 25% reduction in gross receipts” from comparable quarters in 2019 and 2020.
As of October 24, 2022, the latest report made available by the SBA, a little over 11 million loans with a total value of about $786 million loans were issued. According to the SBA, 93% of the loans had been forgiven or partially forgiven.
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U.S. taxpayers spent about $800 billion to fund the payroll protection program. However, not all the loans went towards keeping Americans employed as the program envisioned.
Only About A Quarter Of The Money Went To Jobs
A February 2022 investigation by The New York Times found that “only about a quarter of the money (PPP loans)” was used to pay for wages. According to the newspaper report, the PPP loans “ended up subsidizing business owners more than their workers.” The money, according to David Autor, an economics professor at the Massachusetts Institute of Technology (MIT), the PPP loan funds “went to business owners and their shareholders and their creditors.” The New York Times went on to report that “seventy-two percent of the program’s relief money ended up in the hands of those whose household income is in America’s top 20 percent.” Not only did the program not function as intended, protecting American jobs, but it also led to massive fraud.
The Fraud
According to NBC News, the PPP loan program was “an invitation” to fraudsters. As much as $80 billion was stolen from the PPP program through fraud. The most common form of fraud was inflating the number of employees a borrower reported in their application for the funds. Other schemes included using county records to steal a business identity or starting a business that did not qualify for the program. In one case, government investigators found that “a phone number for a gas station in Houston was used on 150 loan applications.”
How El Paso PPP Loan Borrowers Compare
El Paso News updated its open data project by uploading the SBA’s latest PPP loan data to the project and matching it with our voter data. The data reveals that 8,097 El Paso businesses received a first, second or both PPP loans. In total, our data reveals that $722.3 million in PPP loans flowed to El Paso businesses. The average loan amount was about $89,205.14.
Click here to use our search tool to look up any El Paso business PPP loan.
According to the applications submitted by the borrowers to the SBA, 56,204 El Paso jobs were reported, suggesting that the PPP loans to El Paso businesses would pay $12,851.29 for each employee reported.
Over $351.3 million, or 49% of the loans issued to El Paso businesses have been forgiven since October 3, the latest data available from the SBA. This percentage is considerably lower than the national average of 93%.
An NPR report earlier this year found that sole proprietors, one-person business operators, “hold the highest rate of unforgiven loans, at 13%” compared to the 3% of business with 10 or more employees.
According to our dataset, 47% of all PPP loans issued in El Paso went to one-person businesses. The SBA dataset classifies businesses in different categories including non-profits and corporations. There are three business categories for smaller businesses that are likely one-person operators. These are Single-Member companies (63), self-employed (773) and sole-proprietors (2,957).
The low rate of loan forgiveness for El Paso businesses may correlate to NPR’s analysis that found that a higher rate of single owner borrowers saw their loan forgiveness rate lower than that of larger businesses. That is not the only metric in which El Paso business owners fared worse than their national counterparts.
The Charge Offs
Once the SBA determines that a borrower will not be paying back a PPP loan that was not forgiven by the SBA, it declares the PPP loan a charge-off. Loans charged-off by the SBA included financial hardship and fraud. In 2022, the SBA ended collection attempts to collect around $1.1 billion in delinquent PPP loans. Delinquent PPP loans were those not forgiven by the SBA or were 60 days or more past due.
As of May, the SBA has charged off 390,103 PPP loans, or about 3.4% of the 11.46 million loans guaranteed by the SBA, according to a report by the Business Journals (paywall) on May 18.
According to our PPP loan data, 470 PPP loans issued to El Paso businesses have been charged-off by the SBA. Another 170 PPP loans have been listed as “Exemption 4,” which is a designation for PPP loans that are not paid in full or are charged-off. This represents 7.90% of the El Paso PPP loans, more than double the national average of 3.4%.
In total, the SBA has charged off $12.6 million in El Paso PPP loans, or about 2% of the loans issued to El Paso businesses.
Other PPP Loan Metrics
The SBA PPP loan data provides other business metrics for El Paso. Of the total PPP loans made in El Paso, about 46% went to addresses in congressional district 16, which encompasses most of El Paso. Another 4% went to addresses in district 23. Because the SBA application process did not require all data to be provided, it is unknown what congressional districts the other 50% of the loans were disbursed to.
Of the PPP loans issued in El Paso, 100 of the loans, or 1.81% went to non-profit organizations for a total of about $13 million. The non-profit sector reported 2,520 jobs (4.48%) in their PPP loan applications.
The smallest PPP loan went to a female individual on the westside for $102. The SBA data shows that the $102 was not forgiven nor was it paid back. However, the lender, Prestamos CDFI is facing a class-action lawsuit for failing to disburse the PPP loan funds to an unknown number of the 494,415 loans totaling $7.6 billion the SBA funded for its clients. Prestamos allegedly pocketed the fees and canceled the loans for some its customers. (Alicia Marshall, et al. v. Prestamos CDFI, LLC, (Class Action: 5:21cv04337-JMG, United States Eastern District Of Pennsylvania)
The largest amount, $3,176,508.58, went to Datamark, Inc., Lucchese, Inc. followed with $3,047,835.45 and Pizza Properties came in third at $2,012,444.44. All three loans were forgiven by the SBA.
Datamark reported 489 jobs in its application. Lucchese and Pizza Properties reported 397 and 500 jobs respectively.
The largest non-profits that received a PPP loan were Project Vida Health Center for $1,501,067.22, the YWCA for $1,464,253.95 and the Diocese of El Paso for $1,379,100.52. They reported, in order, 210, 377 and 290 jobs respectively.
The first El Paso PPP loans were forgiven in November 2020 and the last one was forgiven in July 26, 2023.
Now Available As A Searchable Database
El Paso News has now made the PPP loan dataset available to the public as part of our open data project. Visitors can search PPP loan recipients where they can view the amounts loaned, the amounts forgiven, whether the loans were charged-off and all other information made publicly available by the SBA.
Use this link to view the PPP loan data set.
In addition to making the PPP loan data set available we have also integrated it into our El Paso Voter database matching PPP loans to voters as part of our voter modeling project.
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El Paso Voter Modeling with PPP Loan Data
Voter modeling is the process of predicting a voter’s stance on issues and political candidates. The models are built from several data points used to build a prediction model of the likelihood that a specific voter will vote in the next election and which candidate they likely favor over another. The more data that is layered over a voter profile the more likely the model is to be accurate.
In addition to voting histories, other data like census information, purchasing behaviors, education, demographics, job titles, consumer preferences, like pet ownership are layered together to build a predictive model of each voter. Predictive models include public information from professional licensing to social media participation which are layered to build predictive models around issues like race, gun control, taxation, same-sex marriage and other social issues.
Political campaigns use predictive voter models to target voters during elections. This is why some voters received election mailers while others do not.
Information like PPP loan borrowers adds another layer to the voter’s profile by providing information about business ownership, the likely size of the business, the number of jobs that the voter may have influence over and even what the voter’s income may be. PPP loans were issued on income levels reported and in the case of individual business owners, the income levels that were reported were those of the voter’s at the time.
A Real-World Example Of Our Predictive Voter Model – Bob Moore
To further understand how the voter profiling works we will use the editor and founder of El Paso Matters as an example. It is important to remember that voter records are public information and that the example we are using here comes directly from information in our predictive voter models available to anyone looking up the information using our open data project.
According to the SBA PPP loan data, Bob Moore, founder of El Paso Matters and a frequent contributor to his publication received a PPP loan for $15,200.
The PPP loan was issued to Robert Moore DBA Robert Moore. DBA, or “doing business as” (assumed name) is a state requirement for individuals and other businesses to operate a business that is different from the company registration name or an individual’s name in the case of a sole proprietorship. Because Bob Moore was operating his business under his legal name, he was not required to register with the county clerk’s office. Texas also allows individuals to conduct business without registering with the county clerk if they conduct business in their name.
Moore resigned from the El Paso Times on October 6, 2017 and began operating El Paso Matters in February 2020, according to Matter’s profile on Moore. The Texas Comptroller of Public Accounts shows that El Paso Matters was established on March 26, 2019.
In between the launch of El Paso Matters and his departure from the El Paso Times, Moore was freelancing for several news publications, including The Washington Post and Texas Monthly.
Using the predictive modeling in our open data project we have modeled Robert Charles Moore as a 63-year-old male who lives in a house with two other adult voters. Moore’s likelihood of voting in an upcoming election currently stands at 79%. The likelihood of voting model changes as more voter information is added to the dataset. Our model shows that Moore is a white male who lives in a house purchased in 2012 that is currently valued at about $500,000. We also know that the property was assessed around $8,000 in property taxes last year. On the surface this information may demonstrate that Moore may make voter decisions based on high property taxes.
The PPP loan information for Bob Moore layers our voter model for him by adding the dimension of Moore’s income during the time he was launching the El Paso Matters publication.
We know that Moore requested $15,200. The PPP loan information shows that Moore received his PPP loan from Customers Bank in Pennsylvania through Readycap Lending, LLC. for $15,200 on April 15, 2020. This was about two months after launching El Paso Matters. The SBA forgave $15,08.27, which includes the accrued interest on the PPP loan, on January 25, 2021. From this data we can estimate that Moore had an income of about $6,080 annually in 2019 or 2020, not included income-based benefits and retirement income. We arrive at this figure from the PPP loan’s requirement that the amount be set at the average 2019 or 2020 payroll, whichever one was higher. Moore applied for the PPP loan as a sole proprietor, further suggesting that his income at the time was derived from his writing freelance work at the time.
We can glean further information about Moore from his PPP loan profile. For example, Moore used a bank from Pennsylvania for his PPP loan, rather than an El Paso-based bank. Customers Bank is a traditional bank. Moore’s loan was ultimately serviced by Readycap Lending. Because traditional banks favored larger and often favored customers, individuals like Moore had to resort to applying for a PPP loans through online banks.
Moore, the PPP data suggests, did not have a strong relationship with an El Paso bank at the time of the PPP loan program. Exploring our voter modeling further we find that Moore’s household income in 2020 was around $69,000 when we factor his wife’s UTEP salary. However, we do not know if Moore is drawing retirement income, which if he is would raise his income to around $75,000 to $100,000. All Texas state employee’s salaries are a matter of public record and because his wife is employed at UTEP we can find out her annual salary for our models. The most current version is available from the Texas state comptroller’s office.
From the PPP loan data our voter profile model for Bob Moore provides us with an understanding of his household income for the 2020 elections. Combining that the other public records provide us a voter model that profiles Moore as a Democrat with a college degree. Because he has consistently voted in the Democratic Primaries since 2013 when he became a consistent voter our model models him a strong Democrat. We also know that Moore favors early voting ballots. His $8,000 property tax bill along with his estimated income provides us a better understanding of Moore’s voter preferences. His social media footprint provides a clearer voter profile.
Although we cannot know for certain, our model shows that Moore and his wife were likely among the 40,767 voters that voted against Proposition K (climate charter) in the May 6, 2023 elections.
El Paso Votes voter model, accessed on November 4, 2023
Although voter modeling will not show who Bob Moore will vote for, it models a likely candidate that Moore will support over others in the same race.
Public Records And How The Open Data Project Is Different
Since we launched the open data project last week, we have received several questions about the appropriateness of making our data public and how the data is collected. Voter records are public information, and anyone can get a copy of the voter records of all El Paso voters from the County Elections Department.
Information like Texas state employee salaries and PPP loans are published by several outlets, including the Texas Tribune which maintains a robust dataset consisting of searchable public records. Criminal records, professional licenses and property records are also available from official sources and are often searchable through online tools.
To build a profile, one must find the data sources, look up the individual they are interested in and compile a profile manually from the data they have collected. This is cumbersome and takes time to compile manually. Our open data project compiles the data together and makes it searchable.
There are data brokers that sell consumer data to companies. For political candidate purposes there are companies that offer voter profile services to candidates. El Paso Democratic Party candidates often use NGPVAN to profile likely voters. However, NGPVAN is closed to non-Democratic Party candidates and is limited to candidates running for office leaving most El Paso voters without access to voter profiles.
The County of El Paso Elections Department allows anyone to look up voter records online. Although intended for looking up whether an individual is registered to vote or not, the tool is often used to look up other individual’s voting record. Armed only with a name and a birthday, anyone can look up the voting record of their neighbor or friend. Scroll down to “Am I Registered?”
Unlike the elections department we do not publicly expose the home address of the voter or their birthday without requiring the viewer to register. The elections department voter records only provide the information for the ballots cast by the voter to 2015. Our voter data goes back to 2000, although we only publish records going back to 2004 for technical reasons.
Likely the most frequent question we have been asked is why we are making the data publicly available. The answer lies in our fundamental belief that data is an equalizer. Having access to important data for a fee – especially voter data – creates inequality in the community by limiting who has access to what data and how. Most important to the community’s public policy is understanding who votes and what their likely motivations may be. Understanding how organizations like ours model voter profiles and providing you the tools to model your own voter profiles provides El Paso voters an opportunity to better understanding their voting neighbors.
We need your support to keep delivering the news and information that is important to you. We are seeking to raise $5,000 to cover our costs through the end of the year. We would not be asking if we did not need your support.
