The loan-level data for the PPP recently published by the Small Business Administration revealed that over 100 crypto companies in the US received aid under the Paycheck Protection Program to prevent mass layoffs. The majority of the crypto companies received small loans because of their small teams, with the entire industry getting at least $42 million in forgivable loans under the PPP handouts. However, the decentralized economy still depends on centralized finance and government assistance.
90% of crypto companies fell into the bottom loan brackets.
The data published by the SBA does not reveal the exact loan amounts received by companies. Instead, companies are divided into five brackets depending upon several factors. The average payroll calculation caps each employee’s annual salary at $100,000, and only companies with more employees are eligible for larger loans rather than ones with well-compensated employees. The only firm qualified for the largest loan bracket for $5-10 million is ConsenSys, even after the Ethereum-focused software company went through multiple downsizing amid the COVID 19 pandemic. The company announced in February that it was restructuring and downsizing its labor force once again. Getting the highest possible loan under the PPP would mean that its total expenses during the last year would be at least $48 million. Nearly 90% of the crypto companies fell into the bottom category.
The US government extended the PPP program until August.
COVID-19 cases continue to rise in the United States, and the global economy continues to struggle. After assessing the situation, the US government has extended the PPP program until August 8, 2020, to prevent mass layoffs across industries in the country. The extension is good news for both blockchain companies and their employees. The main aim of the PPP program is to provided companies with forgivable loans to keep their employees on the payroll. The number of employees retained by a company plays an important role in both the borrowing and the forgiveness stages of the loan under the Paycheck Protection Program.