Washington, DC – More than 39,000 child care providers accessed at least $2.3 billion in funds through the Small Business Administration’s Paycheck Protection Program, according to a new analysis published today by the Bipartisan Policy Center’s Early Childhood Initiative. These funds allowed 460,000 child care workers to keep their jobs during the worst of the pandemic. Overall, the child care sector only received 5% of the total $521.4 billion in total lending through the program, a small amount for such an essential industry.
“Child care businesses and workers are essential for other sectors of the economy to rebound and succeed, yet we found that a majority of child care programs across the country did not access the Paycheck Protection Program,” said Linda Smith, director of BPC’s Early Childhood Initiative. “According to government statistics, nearly half of all child care programs are small, caring for less than 50 children. These programs lack the business acumen to apply for these loans so it is critical that Congress consider more ways to help child care businesses weather this crisis.”
BPC’s new analysis pulls from publicly available data on recipients of the PPP, and identifies total child care business recipients by state, as well as total and average loan amounts, and total and average jobs retained. We find that the vast majority of loans to the child care industry were under $150,000, with just 11% being above this threshold. Of these smaller loans, the average loan amount for child care providers was around $35,000, nationwide.
While these loans had an undeniable impact on the child care industry, the relatively small representation of child care programs receiving a PPP suggests inequitable access to the program, something we have been concerned about since the program’s inception. The industry received similar amounts as sectors such as public administration, management, and utilities, but the size of the child care industry is disproportionately large compared to these sectors, with an estimated $47.2 billion market and employment of 1.5 million workers in 2019.
States with large populations, such as California, Texas, and New York, received the most funding, while the child care industries in Alaska, Montana, Wyoming, and Vermont each received under $10 million in total funding.
As of June 30, more than $130 billion in PPP funds have yet to be accessed. As Congress considers how to target these remaining funds, it must recognize how the PPP has fallen short in supporting child care, the backbone to our nation’s economic recovery.
BPC experts are available for comment.