Key leaders of both parties took to the Sunday morning talk show circuit and sent optimistic messages that they will be able to break the PPP deadlock and have the Senate approve an upsized PPP funding package on Monday, with House approval to follow on Tuesday.  

• Chuck Schumer: “Very, very hopeful”.
• Nancy Pelosi: “We’re close. We have common ground,” Pelosi said on ABC’s “This Week.” “I think we’re very close to an agreement.”
• Steve Mnuchin: “I’m hopeful that we can reach an agreement” and “I think we’re really close to a deal today [Sunday].”

It sounds like they are targeting another $300B for PPP and $50B for EIDL. Both approvals would require unanimous consent of all members, so the process remains tenuous.

Meanwhile, there is a lot of critical commentary and anecdotal reporting on the clamor for the first tranche, with increased calls for disclosure of recipients and with movie references galore, ranging from The Good The Bad and the Ugly to one banking executive saying “It was like the Hunger Games.” That seems to be the leader in the clubhouse so far for hyperbole, but stay tuned.

Senator Schumer and a host of media and other outlets are calling for more disclosure of the PPP funding data, including funding by demographics and size of business. Here’s a look at some of the analytics out there.

• SBA has published an updated reportshowing PPP fundings through noon on Thursday (April 16), showing:
  • 1,661,367 loans.
  • $342.278 Billion “net approved dollars,” which “do not reflect the amount required for reimbursement to lenders per statute within the CARES Act”. (I think that means the 5-3-1% fees are on top of that amount.)
  • 4,975 lenders, with the leading lender funding more than $14B. That lender appears to be JPMC. SBA listed the top 15 lenders by approved dollars but did not identify them by name.
  • The smallest businesses got the most loans, with “midsized small businesses” (i.e., ones receiving loans of $350k to $1 million) getting the largest share of dollars:

• Bloomberg analyzed how states did as a percentage of payroll. Smaller “red” states did better. Naturally, some commentators are blaming politics.
  • Maybe, but seems unlikely in my opinion. The first loan that I heard get funded was a small business who literally printed out the community bank’s loan application and hand delivered it to the lender. On paper. I think we will find that story repeated a lot. Those banks had the advantage in days 1 through ~3-5, then got swamped as the larger banks got their portals up and running.
  • The Bloomberg article uses data from a former Treasury economist, Ernie Tedeschi. He did some really interesting analysis of the April 13 version of the data, andhis notes are worth reading. Here’s the Bloomberg map and Tedeschi’s industry analysis:

• As far as total potential demand, two accounting professors from University of Chicago estimate the total borrowing capacity to be around $720B, while an RSM economist says demand could exceed $1 trillion and says “ We are definitely going to need a bigger boat.” Sounds familiar.
• A site called https://www.covidloantracker.com/ has been running a survey which purposes to show that out of nearly 10k loan applicants, only 575 actually got a loan. I take that with a full shaker of salt, and suspect that there is a large self-selection bias there, along with a lack of updating after loans were approved.

Finally, just a reminder that the PPP program is not the only stimulus package out there. Here’s an interesting infographic. from Tedeschi showing the relative size of the of the various stimulus levers from the CARES Act:

We are expecting updated term sheets from the Fed regarding the Main Street facilities sometime this week. We will be on the lookout and provide updates as warranted on those and, hopefully “PPP v2.0 – Catching Fire”.