New Jersey small businesses greatly improved their access to federal funding in Round 2 of the Paycheck Protection Program, according to an analysis by New Jersey Business & Industry Association’s research nonprofit Focus NJ.

“Through the first two rounds of the PPP program, it is clear that New Jersey fared relatively well compared to other states,” said Focus NJ Executive Director Nicole Sandelier in a statement.

“But while there is currently no data that quantifies which New Jersey businesses did not apply or why, we can conclude that a large number of small businesses in the Garden State have not received assistance through the PPP and they continue to weather the economic downturn with limited federal assistance.”

An estimated 86 percent of New Jersey businesses have not received federal assistance through the PPP, Focus NJ found in its Making Sense of the Federal Paycheck Protection Program report.

New Jersey ranked ninth in the nation for loans issued with 124,489, and eighth overall in funding received, having drawn $17.6 billion through the first two rounds of the program.

Approximately 14 percent of Garden State small businesses received loans, which is on par with states that received a similar amount of funding, according to an analysis of U.S. Small Business Administration data.

“Given that Round 2 funding of the PPP has not yet been exhausted, it appears that most businesses that wanted funding, and are eligible, have received it,” Sandelier said.

In Round 1, New Jersey ranked 20th in PPP loans awarded and 10th in the amount of money received, with an average loan size of $284,251—second highest in the nation behind California, indicating loan recipients were larger small businesses.

Higher percentages of small businesses in less popular states received more PPP loans than in New Jersey, and Sandelier explained, “PPP loans were based on who submitted complete applications first. So it stands to reason that less populated states would serve a larger portion of their small businesses than higher populated states like New Jersey.”

In Round 2 of PPP funding, New Jersey ranks sixth in the nation in loans awarded, with 90,790 awarded thus far, and fifth overall in money received, totaling $8 billion. The average PPP loan size in Round 2 in New Jersey is $88,244, according to SBA data. That’s the fourth highest in the nation behind Washington, California and New York.

“The role of community banks may also be a factor in the improved performance from Round 1 to Round 2,” Sandelier said. “According to the Federal Reserve Bank of New York, states where community banks play a large role secured loans for a larger percentage of their small businesses.

“Community banks have a lower market share in states like New Jersey, New York, and California,” she said. “So if small businesses engaged larger banks, or had to take time to create a relationship with a smaller community bank, it makes sense that fewer of them received loans. Their applications took longer to process, making them more likely to miss Round 1 funding, as PPP guidance warned.”