This story was originally published by PublicSource, a news partner of NEXTpittsburgh. PublicSource is a nonprofit media organization delivering local journalism at publicsource.org. You can sign up for their newsletters at publicsource.org/newsletters.

The federal Paycheck Protection Program [PPP] awarded more than $1.5 billion to 10,675 small businesses and nonprofits in the Pittsburgh area during the spring and summer, according to data released in December by the Small Business Administration.

But the size of the loans was based on 2019 payroll data and the program was not designed to evaluate which businesses were most in need — potentially exacerbating some of the local economy’s existing inequalities.

This money supported at least 125,000 jobs at businesses with Pittsburgh mailing addresses, which includes several nearby suburbs. But the actual number of jobs supported could be significantly higher because a quarter of the companies didn’t report their job totals. There were just under 300,000 jobs in the city of Pittsburgh in 2019, according to census data.

Companies were asked to provide their employee data but were not required to. They will, however, have to provide their employee data to their lender if they want the loan to be forgiven, according to a spokesperson for the Small Business Administration [SBA].

The money went disproportionately to the small businesses with the biggest payrolls. The top 1% of businesses receiving PPP loans yielded more than $400 million, more than the bottom 80% of businesses combined. The top 10% of businesses received more than two-thirds of the total local money infused by the PPP.

RYCON Construction Inc., a construction company, and Sargent Electric Company, an electrical contractor, were the only two local companies to receive the maximum loan amount of $10 million. Sargent’s projects were shut down during the pandemic, according to an emailed statement from its president, Rob Smith, though he said non-disclosure agreements prevented him from going into more detail.

“The PPP program allowed companies such as Sargent to be ready to support our customers as they gradually recovered their ability to continue their projects,” Smith wrote. “Today, we have some significant programs that are still delayed due to our customers’ economic situation, though most of our projects have resumed and are proceeding.”

RYCON Construction didn’t respond to an interview request.

The third-largest recipient was TeleTracking Technologies Inc., a healthcare IT company that was embroiled in controversy over the Trump administration’s decision to pay it $10 million to track national COVID-19 hospital data instead of tracking it through the Centers for Disease Control and Prevention. TeleTracking received $9.7 million in PPP funds. TeleTracking didn’t respond to an interview request.

PublicSource

Although the majority of companies didn’t list the demographics of their ownership, those that did showed businesses owned by white men benefited most from the PPP. Of the nearly 2,000 businesses that listed an owner’s gender, four times as many were owned by men than by women.

And of those that listed a race, 22 times more businesses listed white ownership than Black ownership. There were around 25,000 businesses counted in the city of Pittsburgh in a 2012 census estimate, but as of 2018 only 380 businesses had been certified as a minority or female-owned business in all of Allegheny County.

PPP loans were given out based on 2019 salary data, so the new data also sheds light on the payrolls of thousands of privately held city businesses that otherwise aren’t required to publicly share their payroll data. Financial analysts can estimate the size of the largest privately held companies.

But the majority of the small and medium-sized businesses who received PPP loans are not required to publish financial statements and only privately send tax information to the Internal Revenue Service. So the PPP loans are the first widely shared financial information about private businesses in the country.

Brian Webster, a senior manager at the accounting firm Schneider Downs & Co. Inc., said that, even though many of these private businesses are used to keeping their financial information private, his company was aware that freedom of information laws would make information on the loans public, and it advised clients accordingly.

“It is possible that some companies may not have been aware, or that some companies may have elected not to accept a PPP loan for that purpose, although we don’t have any specific examples of that,” he said in response to questions relayed through a spokesperson.

Schneider Downs received more than $8.8 million in PPP loans, the fourth highest in the area, but didn’t respond to a request for comment on its own loan. Webster said that “Anecdotally, most companies probably did take the maximum that was permitted based on their own calculation.”