Home-Based Care Providers Net More Than $666M in Small PPP Loans

More than 15,000 home-based care providers nationwide received loans of less than $150,000 under the Paycheck Protection Program (PPP).

California, Florida and Texas saw the most agencies receive such loans, boasting a total of nearly 5,400 home-based care recipients across all three states, a Home Health Care News analysis of publicly available PPP data found.

Meanwhile, smaller, less populous states understandably boasted fewer home-based care PPP loan recipients. However, agencies in two of those states — Rhode Island and Vermont — received the highest average loan amount.

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Those are just a few key findings HHCN uncovered while mining July 14 PPP data released by the Small Business Administration (SBA).

As part of its analysis, HHCN sorted the federal data by NAICS code to identify home-based care PPP recipients that received less than $150,000. From there, HHCN analyzed the data on a state-by-state basis.

The North American Industry Classification System, or NAICS, is a classification of business establishments by type of economic activity. NAICS codes are used by government agencies and businesses in Canada, Mexico and the U.S.

Recipients of these relatively smaller loans will be generally safe from audits, as the Treasury Department and the SBA have said businesses borrowing less than $2 million are considered to have made their loan requests in good faith.

HHCN has yet to review the data for agencies that received more than $150,000 in PPP loans.

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Combined, the more than 15,000 PPP loans of under $150,000 issued to home-based care providers total roughly $666.36 million.

Explore: PPP loan totals by state

This map shows PPP loan totals by state. Darker blues represent higher PPP totals in U.S. dollars. Hover over a state for specific dollar amounts. (Graphic by Kosti Marko/Home Health care News)

Most loans by state

PPP was created by the CARES Act as a way to keep small and mid-sized businesses afloat — and keep their workers employed — amid the COVID-19 emergency. It has provided billions of dollars in forgivable loans to organizations across a variety of industries, including home health and home care.

As long as recipients meet certain requirements — such as spending 60% of their loans on payroll and maintaining their previous full-time equivalent employee headcount, for example — the loan is eligible for full forgiveness.

While many home-based care providers have been hesitant to accept PPP loans, the data suggests thousands of agencies in Texas, California and Florida were confident enough to make the leap.

California saw the most home-based care agencies take out PPP loans of less than $150,000, according to the HHCN analysis. Specifically, 1,996 did so, with those agencies receiving a combined total of just over $92 million.

Florida saw the second-most PPP loan recipients, with 1,828 providers receiving a combined total of more than $54 million.

Meanwhile, 1,540 providers in Texas took out relatively small PPP loans, with recipients receiving a combined total of just under $78 million.

The fact that so many providers in Florida and Texas took out PPP loans is somewhat surprising, as those states are just now experiencing COVID-19 surges. The coronavirus resurgence is so intense in those states that many cities and counties are rolling back reopening plans while implementing new restrictions.

California accounted for 13.81% of all PPP loans of under $150,000 that went to home-based care providers. Texas and Florida accounted for 11.69% and 8.16%, respectively.

PPP loan recipients by state

This bar chart shows the number of home-based care recipients of PPP loans of under $150,000 in each state. Hover over a bar to see the total. (Graphic by Kosti Marko/Home Health Care News)

Leveraging PPP

To be eligible for forgiveness, PPP loan money can only be used for certain expenses. Those include payroll, rent, mortgage interest and costs directly related to COVID-19.

Even with the strict guidelines, home-based care agencies have gotten creative when it comes to leveraging their PPP money.

For example, some providers are using it to finance additional hazard pay for their workers amid COVID-19. Doing so has helped incentivize caregivers to stay on the front lines rather than temporarily drop out of the workforce amid the coronavirus emergency.

“Companies are using these funds to be able to increase an hourly rate at this time, providing a level of essential pay as well as other funding and programs to support caregiver retention,” Emma Dickison, CEO and president of Home Helpers, said in April.

Average loan amounts

While California, Texas and Florida saw the most agencies receive PPP loans, Vermont, Rhode Island and Idaho came out on top in terms of the average loan amount agencies received.

In Vermont, only 13 home-based care agencies received PPP loans. However, each agency received an average loan of nearly $70,000.

Comparatively, the average home-based care loan recipient in Florida only received about $30,000.

Meanwhile, Rhode Island saw 22 agencies receive an average of about $68,000, and Idaho saw 60 agencies get an average of nearly $63,000 each.

The U.S. average PPP loan amount of under $150,000 made to home-based care providers is slightly less than $45,000.

Data visualizations and additional reporting by Kosti Marko

*Editor’s note (July 17, 2020): HHCN used NAICS code 621610 during its analysis of PPP data. NAICS code 621610 includes “establishments primarily engaged in providing skilled nursing services in the home,” along with a range of other in-home care services, including personal care services, homemaker services, therapy services, medical social services and more.