SSTI Digest

SBA began offering a second round of the Paycheck Protection Program (PPP) on April 27, and SBA’s data indicate this round is better distributed across businesses and the states than the first. As of May 8, round two has approved $189 billion across nearly 2.6 million loans, 55 percent more than in all of round one. The average loan size in round two is $73,488, which is a significant drop from the first round’s average of $206,022. Combined, $531 billion has been distributed in 4.2 million PPP loans. Despite the national increase in loan approvals, 20 states have received fewer loans so far in round two. One reason that per-state award levels are diverging is that loan approvals are increasing on a per capita basis: from 5.0 loans per thousand in round one to 7.8 loans per thousand in round two. As round two of the PPP has so far approved just 54 percent of round one’s funding level, round two has seen fewer dollars flow to almost every state. California, Nevada and the territories are the only regions seeing greater volume so far in round two. Every state has seen its average loan size decrease by at least half and many by closer to two-thirds,…

The U.S. Cluster Mapping Portal has received a data refresh with updated cluster profiles and performance benchmarks for all U.S. regions. This free tool is useful for understanding regional composition of traded sectors and strengths, which could be especially beneficial in these challenging times as businesses attempt to restore their supply chains.

As the economic fallout continues from the coronavirus pandemic and associated shutdown, states are still uncertain as to what their financial situations might be as they attempt to craft their new spending plans for a quickly approaching new fiscal year, which for most states start July 1. Last month, New Jersey state leaders took a unique approach to the situation by extending the current fiscal year from June 30 to September 30. The extension addresses a number of issues. The extension allows the state to delay adoption of their state’s new 2021 state budget by three months, allowing time for lawmakers and officials to assess the economy and state finances after the worst of the coronavirus pandemic subsides. Additionally, New Jersey, like most states with a state income tax, also extended their deadline for paying state taxes to July 15 from April 15, in order to align with the federal government’s pandemic-related 90-day extension to file federal income taxes. By extending the fiscal year to September 30, it will retain state income tax revenue in the current fiscal year, which will presumably reduce the size of the budget hole the state will have to address.…

U.S. Secretary of Commerce Wilbur Ross today announced that the Department’s Economic Development Administration (EDA) is now accepting applications from eligible grantees for Coronavirus Aid, Relief, and Economic Security Act (CARES Act) supplemental funds (EDA CARES Act Recovery Assistance) intended to help communities prevent, prepare for, and respond to coronavirus. EDA will make the recovery assistance grants under the  under the authority of its Economic Adjustment Assistance (EAA) program, which is intended to be flexible and responsive to the economic development needs and priorities of local and regional stakeholders. EDA CARES Act Recovery Assistance investments will support a wide range of non-construction and construction activities, including Revolving Loan Funds, in regions across the country experiencing severe economic dislocations brought about by the coronavirus pandemic. Examples of projects that EDA may fund through its CARES Act Recovery Assistance include economic recovery planning and preparing technical assistance strategies to address economic dislocations caused by the coronavirus pandemic, preparing or updating resiliency…

Frontline workers in Michigan who don’t have a degree may find a tuition-free pathway to college or a technical certificate, in the same manner as the G.I. Bill following World War II, while others states are also pursuing options for increased educational opportunities for workers who have lost their jobs due to COVID-19. Frontline workers in Michigan may have the opportunity to obtain a college degree or technical certificate if a proposal by Gov. Gretchen Whitmer is passed. The governor announced the initiative, called Futures for Frontliners, last week. It was inspired by the federal government’s G.I. Bill following World War II that enabled free tuition for soldiers returning from the war. Whitmer said the program, which the state described as the first of its kind in the country, is a way to thank those on the front lines of the crisis. “This program will ensure tuition-free college opportunities and give these dedicated Michiganders an opportunity to earn a technical certificate, associate degree or even a bachelor’s degree,” the governor said in a release about the initiative. Last month a bipartisan…

As college students close out highly disrupted spring semesters, higher education institutions across the country are trying to determine what the fall semester will entail, which has proven to be tricky at best. On campus or online instruction, hybrid plans and increased protections for students’ wellbeing are all topics administrators are grappling with in the midst of the pandemic. Meanwhile, prospective students are up in the air regarding their plans, as well, with a recent report revealing that domestic undergraduate enrollment for four-year institutions could decline 20 percent. A report from SimpsonScarborough, a higher education research, branding and marketing agency, showed that one in 10 U.S. high school seniors who were planning to attend a four-year college or university prior to the pandemic have already made alternative plans, with nearly half planning to attend a community college, about a third planning to enroll in an online college, and the remainder thinking they may not attend college at all this fall. The firm sampled high school seniors and current residential college students in March and replicated the survey a month later to better understand…

In early March, we shared that organizations who use a web address ending in .ORG should be aware that a management change could result in registration fees for domain names doubling. Late last week, the news broke that ICANN rejected the sale of the .ORG registry to private equity firm, Ethos Capital. The ICANN Board faced a unique and challenging scenario that would impact more than 10.5 million domain names, one of the largest registries. After deliberation, the board decided that the public interest is better served in withholding consent as a result of various factors that create unacceptable uncertainty over the future of the third largest generic top-level domain registry. A number of factors were considered such as the request to contract with a completely different form of entity rather than maintain its 20-year contract with the mission-based, not-for-profit; the protection and benefits of .ORG registrants as a result of the conversion; and, the uncertainty of an untested Stewardship Council that might not be properly independent. Nearly 900 organizations and 64,000 individuals joined in the #SaveDotOrg campaign to stop the sale of the .ORG registry.…

The U.S. Securities and Exchange Commission is implementing a rule that relaxes restrictions on crowdfunding through next February, according to a Federal Register notice published today. The net result of the temporary rule is to accelerate the timeline for a company to access capital through crowdfunding, at the expense of some public access and investor information. Specific changes include: allowing companies to make offers before providing financial statements; financial statements will no longer require independent validation; and, sales can occur without holding the solicitation publicly for 21 days. Companies wishing to utilize these rules must qualify for crowdfunding and have been organized and in operation for at least six months before making the offering.

The most recently-passed federal legislation to address COVID-19 included funding for the National Institutes of Health (NIH) and the Biomedical Advanced Research and Development Authority (BARDA) to accelerate testing. The provision, added by Sens. Roy Blunt and Lamar Alexander, was envisioned to take an approach similar to TV’s “Shark Tank.” NIH is implementing the funds as a three-phase, “Rapid Acceleration of Diagnostics (RADx),” challenge with up to $500 million in prizes. Teams with COVID-19 testing solutions will submit proposals, which will be evaluated by experts from the five hubs of NIH’s Point-of-Care Technologies Research Network. Finalists will receive assistance from experts before the final selection is made.

Last week, the U.S. Department of the Treasury published new guidance for how state and local governments can use the $150 billion in relief funds provided by the CARES Act. The guidance provides some flexibility to recipients to address “second-order effects” of the COVID-19 pandemic. On a long, but “nonexclusive” list of eligible expenditures, Treasury included expenditures related to small business grants to reimburse costs from related interruptions and costs related to a payroll protection program. State, territorial and tribal governments, as well as municipal governments with populations greater than 500,000 were eligible for these relief funds, which had to be requested by April 17. Generally, funds can cover necessary expenses incurred between March 1 and December 30 that were not part of the government’s budget in effect on March 27, 2020.

In this week’s edition of Useful Stats, we take a look at NIH’s SBIR/STTR program by state, including the success rate of applications, the share SBIR awards make up of NIH funding to for-profit companies by state, and the total number of awards by state. It should be noted that SSTI was able to prepare this information because of the excellent transparency of information that NIH offers on its website, a model that should be replicated by other federal agencies. Success Rates A useful measure of states’ SBIR/STTR activities is the rate at which applications for funding are awarded. Nationwide in 2019, NIH made SBIR/STTR awards to 1,329 successful applicants out of 6,084 total applicants — equating to a national success rate of 21.8 percent. While California submitted the most applications (1,333), received the greatest number of awards (270), and received the greatest amount of funding ($116.3 million), it ranked 31st in terms of its application success rate (20.3 percent), which is lower than the national rate. Similarly, Massachusetts submitted the second most applications (549), received the second greatest number of awards (154), and the second greatest amount of…

In Pennsylvania, the Department of Community and Economic Development (DCED) announced last week that new funding is available to help technology-based companies impacted by COVID-19. In recognizing that the state’s tech companies have been stepping up to provide innovative ways to produce personal protective equipment and other supplies, DCED Secretary Dennis Davin said in a release that “we must make sure they remain in a position to provide those critical services and ideas in our response to this pandemic.” The Ben Franklin Technology Development Authority (BFTDA) approved the disbursement of $1 million in funding to each of the four Ben Franklin Technology Partners (BFTP), which will then match that funding with $1 million. Each BFTP will identify eligible projects and will provide capital to existing startup clients experiencing hardships due to the impact of COVID-19. Additional funding opportunities are available through the Venture Capital Revolving Loan Account, which can be used to make loans to venture capital funds that invest in technology companies in Pennsylvania. BFTDA venture managers will be required to identify specific COVID-19 impacted…