Doctors and lawyers cash in on pandemic aid

Nearly 20,000 companies and nonprofits in WNY received $2.4 billion in federal assistance via the Paycheck Protection Program. The professions made out especially well.

The final numbers are in: the federal government poured more than $2 billion into the local economy this spring and summer in an effort to blunt the economic impact of the coronavirus pandemic.

About 19,850 for-profit companies and nonprofit organizations in the region’s eight counties received $2.4 billion in loans under the Paycheck Protection Program. The loans, convertible to grants, ranged from $10 million to less than $1,000.

As a group, no one secured more money than doctors. Other top recipients include restaurants, lawyers, car dealers, skilled nursing facilities and construction contractors.

Three recipients received $10 million, the maximum allowed under the program: Ferguson Electric, the Buffalo Medical Group and Erie County Medical Center. 

Amanda Fischer, a policy director at the Washington Center for Equitable Growth, said the program is falling short of one of its main goals: saving small businesses.

“It didn’t keep businesses open that would otherwise shut,” she said. “It went to businesses mildly hurt by the pandemic — like construction, for example.” 

Construction-related businesses in Western New York, including contractors and developers, obtained $179 million. Only two groupings of businesses received more.


Who got what: Search our database of WNY recipients


The program’s size — nearly 20,000 recipients, several billion dollars in loans — “dwarfs anything we have seen before. It is truly unprecedented,” said Veljko Fotak, an associate professor of finance at the University at Buffalo.

Consider that the Small Business Administration, which oversaw the program, lent $150 million last year to businesses in Western New York. The PPP loans were 20 times that value and were distributed in just four months, Fotak said.

The loans far exceeded the state money invested in the Buffalo Billion, too.

“The PPP program is three times as large, results in direct capital injections, and has a timeframe measured in weeks, not years or decades,” Fotak said. 


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The loans didn’t stop the regional economy from cratering, however. After the pandemic’s first wave, the Buffalo-Niagara region’s private sector workforce dropped to its smallest size in 30 years. But things could have been worse, several experts said.

“It really did help stabilize the economy. Even with its shortcomings, it was a good thing,” said Fred Floss, a professor of economics at Buffalo State College.

An Investigative Post analysis of the program found:

  • The industries receiving the most in loans were healthcare providers, who obtained about $273 million; professional services, $220 million; construction-related businesses, $179 million; and restaurants, $166 million.
  • Some 990 of the companies and nonprofits that borrowed at least $500,000 apiece — 5 percent — obtained more than half the loan funding. 
  • Businesses borrowing less than $150,000 accounted for about 84 percent of loans, but only 25 percent of the funds received. Full-service restaurants were the most numerous recipients of the smaller loans, followed by law firms, doctors’ offices and medical practices. 
  • The vast majority of loans went to businesses with under 100 employees. The median workforce was 32 employees for companies receiving loans over $150,000 and four for those receiving less assistance.
  • In addition to businesses, some 1,080 nonprofits received 12 percent of the loan funds, totaling $268.7 million. Health care providers — including hospitals and physician groups — led the list of recipients. They were followed by schools, including private colleges, charters and those affiliated with religious institutions. Churches and other faith-based organizations came next.
  • The money went to where jobs are concentrated. Businesses and nonprofits in Erie County garnered 73 percent of the funds in the eight-county area. Businesses in the 14221 zip code, which includes Williamsville, received more than any other, about 9 percent of the entire program. 

Rep. Brian Higgins, D-Buffalo, said seeing doctors, lawyers and car dealers among the top recipients “won’t sit well” with some. However, he noted that many are significant local employers. 

“It doesn’t matter what you do in this economy,” he said. “Whatever it is that you do … you took a major hit because the economy was on a government mandated lockdown.” 

The largest recipients

This story, and those that follow the next three days, are based on an Investigative Post analysis of federal records of 19,848 loans received by companies and nonprofits in the eight counties of Western New York between April and August.

The analysis was completed with the assistance of Good Jobs First, a subsidy watchdog group based in Washington, D.C. Our data analysis was supplemented with interviews with more than two dozen economists, business owners, nonprofit leaders and assorted experts.

Nationally, the Paycheck Protection Program made $523 billion in loans, primarily to companies and nonprofits with up to 500 employees. Sixty percent of that money was earmarked to cover  2.5 months of payroll costs. The rest could cover other operating expenses, including rent. The loans are forgivable if used appropriately.

Doctors received the most help in Western New York. They collectively borrowed $117.2 million, Investigative Post found. Next came full-service restaurants: 1,022 of them secured $87.6 million. Rounding out the top five were lawyers, car dealers and skilled nursing facilities.


Largest recipients by industry

Type Loans Value
Offices of Physicians (except Mental Health Specialists) 461 $117,214,603
Full-service Restaurants 1,022 $87,600,664
Offices of Lawyers 617 $72,204,484
New Car Dealers 119 $68,498,369
Nursing Care Facilities (Skilled Nursing Facilities) 58 $58,365,783
Plumbing, Heating, and Air-Conditioning Contractors 286 $48,380,601
Limited-service Restaurants 348 $40,265,803
Electrical Contractors and Other Wiring Installation Contractors 166 $34,639,139
General Freight Trucking, Local 196 $34,430,389
Offices of Dentists 345 $33,577,383
General Medical and Surgical Hospitals 17 $32,566,831
Home Health Care Services 63 $31,557,841
Elementary and Secondary Schools 64 $29,068,553
Commercial and Institutional Building Construction 165 $28,743,026
All Other Specialty Trade Contractors 195 $27,107,745
Hotels (except Casino Hotels) and Motels 169 $25,429,734
Engineering Services 90 $24,399,185
Religious Organizations 454 $22,881,767
Highway, Street, and Bridge Construction 45 $21,086,312
Site Preparation Contractors 97 $19,908,715
Insurance Agencies and Brokerages 344 $18,615,200
All Other Professional, Scientific, and Technical Services 150 $18,423,323
Machine Shops 98 $18,233,699
Offices of Certified Public Accountants 133 $17,917,566
Collection Agencies 91 $17,385,963
Source: Small Business Administration.

The industry ranking was predictable to E.J. McMahon, a senior fellow at the Empire Center for Public Policy, an Albany think tank and research organization. The largest recipients do a lot of business and pay well, he said. The geographic distribution made similar sense, he said. 

“It simply reflects the distribution of where businesses are, particularly professional firms,” McMahon said.

Ted Schmidt, an economics professor at Buffalo State College, wasn’t surprised by where the money went, either. He and McMahon said the distribution reflects existing economic disparities. 

“The money went where the money is,” he said. 


Loans by zip code

Zip Code Municipality Loans Value
14221 Amherst (Williamsville) 1,583 $212,642,556
14202 Buffalo (Allentown, Downtown, Marina) 480 $103,734,812
14225 Cheektowaga 463 $94,937,314
14150 Tonawanda / Grand Island 576 $94,925,535
14203 Buffalo (Downtown, Skyway, Casino) 324 $94,033,751
14127 Orchard Park 712 $79,741,493
14226 Amherst (Eggertsville, Snyder) 561 $69,487,999
14094 Lockport 650 $69,162,481
14228 Amherst (UB, Getzville) 420 $66,298,907
14224 West Seneca 579 $65,135,182
14086 Lancaster 421 $54,649,111
14206 Buffalo (Babcock, Lovejoy, Kaisertown) 236 $53,250,404
14701 Jamestown 422 $53,097,727
14075 Hamburg 596 $48,735,284
14120 North Tonawanda / Wheatfield 491 $48,209,744
14227 Cheektowaga 217 $46,419,908
14207 Buffalo (Black Rock) 265 $44,928,924
14304 Niagara Falls 389 $42,953,239
14020 Batavia 320 $42,308,441
14043 Depew 347 $39,751,663
14059 Elma 199 $35,977,353
14215 Cheektowaga 239 $35,091,388
14217 Buffalo (Kenmore) 330 $32,719,252
14204 Buffalo (Fruit Belt, Willert Park, First Ward) 128 $32,105,953
14031 Clarence 217 $31,712,610
Source: Small Business Administration.

The program’s design blunted the economic stimulus’s potential payoff, some experts told Investigative Post. High-wage earners, like doctors and lawyers, tend to spend a smaller portion of their paycheck than those earning less. That’s consequential in an economy driven primarily by consumer spending.

“If you give the money to individuals who don’t have a lot of money — the lower-paid workers — they’re going to spend more of it,” said Floss, the Buffalo State professor. “That’s going to have the biggest economic impact.” 

Disagreement on impact

Opinions vary on the program’s local success, but the numbers show the pandemic decimated the workforce.

Private-sector employment in Erie and Niagara counties dropped by a quarter at the height of the pandemic, followed by a modest rebound. By September, the private-sector workforce was down 9.6 percent from the previous year.

“It’s the smallest private-sector workforce in 30 years, by a good deal,” McMahon told Investigative Post. 

The leisure and hospitality industry, which includes restaurants and bars, continues to be the hardest-hit sector in the region. It’s lost 25 percent of its jobs from a year ago. Trade, transportation and utilities, a category which includes retail stores, is down 11 percent.

Academics across the country are assessing the program at a national-level — and drawing different conclusions.

In July, scholars at the Massachusetts Institute of Technology and the University of Chicago studied the program’s early rounds. They tracked declines in hours worked and business closures throughout the country and found the loans didn’t have “substantial effect on local economic outcomes.” 

“Firms appear to use first-round funds to build up savings and meet loan and other commitments,” the report said. 

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Another paper, published jointly by Columbia University and the American Enterprise Institute, found the program “substantially increased the employment, financial health, and survival of small businesses” over a wider time-frame.

“We find that the effect of PPP on small business outcomes is increasing over time, with larger effects in August than in April or May,” the paper said. 

Fischer, the policy director at the Washington Center for Equitable Growth, said researchers have found the money went to businesses “impaired” by COVID, but not devastated, like construction.

“Construction projects probably slowed down because the economy slowed down,” she said, “but construction workers in most states are deemed essential, so they’re going to work anyway.”

Fischer said the “biggest gap” in the public’s understanding of the program are the “race and ethnicity consequences.” That’s because applicants and lenders weren’t required to report gender and race data as part of the loan application. The vast majority in Western New York area did not. 

Higgins, the congressman, said the federal government owes the public a proper accounting of where the loans did and did not reach. It was an aid package designed amid a public health crisis, but it’s public money, in the end. 

“You need accountability during those times as much, if not more, than you do in a time with a semblance of normalcy,” he said. 


Disclosure: Investigative Post, a nonprofit, received a $43,778 loan, which enabled us to keep our staff intact and reporting through the pandemic.


Andrew Bailey of Primary Data assisted in our data analysis.