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How much have banks made from SBA PPP? About $17 billion by June 2020
In April 2020, NPR and others estimated banks made $10 billion in lender fees in the SBA PPP— as of 20 June 2020, I estimate that number is closer to $17 billion.
Lenders Are Taking Their Cut
Small businesses aren’t the only ones benefiting from the Small Business Administration Paycheck Protection Program, or SBA PPP — banks might be taking home a decent cut from the SBA, too.
As early as April 2020, some estimates placed bank fees at around $10 billion; however, with an additional $200 billion in lending since then, I estimate the number is closer to $17.6 billion as of 12 June 2020.
Interested in scrutinizing my estimation methodology?
PPP Lender Fees
According to Treasury.gov, SBA will pay lenders fees for processing PPP loans in the following amounts:
- Five (5) percent for loans of not more than$350,000;
- Three (3) percent for loans of more than $350,000 and less than $2,000,000;and
- One (1) percent for loans of at least $2,000,000.
Given the fee guidance from Treasury, to estimate bank fees all we need are the number of loans and their values by tier.
