Alicia Rihn et al., Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry April 3-August 8, 2020 (2021)

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A University of Tennessee Institute of Agriculture publication, W 975, titled Paycheck Protection Program Loans in Tennessee's Landscape Services Industry April 3-August 8, 2020, by Alicia L. Rihn, Sreedhar Upendram and Kimberly L. Jensen of the Department of Agricultural and Resource Economics, dated January 2021. It describes the landscape services industry, which in Tennessee consists of 1,679 firms employing 12,475 workers, and the CARES Act and the Paycheck Protection Program. It states that the report summarizes PPP loans approved to landscaping firms in Tennessee and neighboring states, covering the number of loans, geographic concentration, jobs retained and loan amounts, and includes only loans up to $150,000.

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“Alicia Rihn et al., Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry April 3-August 8, 2020 (2021).” Original at solutions.tennessee.edu. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/alicia-rihn-et-al-paycheck-protection-program-loans-in-tennessee-s-lan-ae6732d0f2/, SHA-256 c1fe519fb399e01d114db09c61260687e4fba97ed79485c12eea225674ec93ea.

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W 975

Paycheck Protection Program Loans in
Tennessee’s Landscape Services Industry
April 3-August 8, 2020

Alicia L. Rihn
Sreedhar Upendram
Kimberly L. Jensen
Department of Agricultural and Resource Economics

January 2021

Landscape service firms provide commercial landscaping services including design,
installation and maintenance of turfgrass lawns, ornamental plant beds, gardens and other
outdoor areas for private residences and commercial properties. In 2020, the U.S. landscaping
services industry consisted of 510,000 firms who had a revenue of nearly $102 billion and
employed one million people with wages of $32.9 billion (Diment, 2020). In Tennessee, the
landscaping industry consists of 1,679 firms employing 12,475 workers with an annual payroll
of $424.5 million indicating an annual average wage of $34,000 (U.S. Census Bureau, 2018).
The majority (82 percent) of the industry’s products and services are related to landscape
maintenance activities (Diment, 2020). Thus, this industry’s revenue is closely tied to new
housing developments, the housing market (in general) and consumers’ disposable incomes.

On March 11, 2020, the World Health Organization (WHO, 2020) declared the Novel
Coronavirus Disease (COVID-19) a pandemic. Shortly after, on March 13, 2020, the COVID-19
outbreak was declared a national emergency by President Trump (White House, 2020).
Actions were taken to decrease community spread and Americans were encouraged to stay
home, avoid large group gatherings and avoid unnecessary outings. Aligning with these
directions, Tennessee’s Governor Lee passed the Executive Order No. 22 (EO 22) encouraging
people to stay at home except for essential activities or services (State of Tennessee, 2020).
Under EO 22, landscape management was deemed an essential infrastructure operations
service and landscaping firms were allowed to remain open. However, several factors
related to the COVID-19 pandemic and economic downturn could negatively impact the
landscaping service industry. For example, businesses who closed or reduced their activities
could influence product availability through supply chain disruptions, as well as customers’
employment and disposable incomes potentially dropping, reducing spending on
non-essentials. Furthermore, the landscaping service industry is heavily influenced by the
housing market which experienced a drop in March and April, 2020 potentially due to the

Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry 1
uncertainty caused by the pandemic (U.S. Census Bureau, 2020). Despite this momentary
drop, the housing market rebounded and continued to have positive growth after those
first few months of the pandemic meaning the impact of this drop on the landscape service
industry was likely temporary.

In order to mitigate potential economic hardships from the pandemic, the Coronavirus Aid,
Relief and Economic Security (CARES) Act was passed on March 27, 2020 (U.S. Department
of Treasury, 2020). As part of the CARES Act, the Paycheck Protection Program (PPP)
was implemented and administered by the Small Business Administration through local
lending firms. The goal of the PPP was to provide support for payroll and other operating
expenses to small businesses during the pandemic and economic downturn. The PPP
provided over $660 billion in forgivable loans (Bureau of Economic Analysis, 2020).
This report summarizes the PPP loans approved to landscaping service firms in Tennessee
and several neighboring states to provide an overview of the aid and its influence in
Tennessee’s landscaping services industry.

Data Description
Metrics summarized in this report include the number of loans approved, geographical
concentration of loan approvals, jobs retained through the program and loan amounts. Only
loans up to $150,000 were included in this analysis. Several neighboring states, including
Alabama (AL), Georgia (GA), North Carolina (NC), South Carolina (SC) and Virginia (VA), were
also analyzed for comparison purposes. The states were selected to align with the previous
report on the nursery and greenhouse industry and the Paycheck Protection Program (Rihn &
Jensen, 2020). The PPP loans, sourced from the U.S. Department of Treasury on September
2, 2020, includes data from April 3, 2020, through August 8, 2020. At the time of this report,
data was not available for the PPP after August 8, 2020. The 2017 North American Industry
Classification (NAICS) codes were used to isolate and extract data on the landscaping service
industry. Specifically, the NAICS code 561730 – “Landscape services” was used in this report
which includes firms engaged in “landscape care and maintenance services and/or installing
trees, shrubs, plants, lawns or gardens” and firms who provide “these services along with the
design of landscape plans and/or the construction (i.e., installation) of walkways, retaining
walls, decks, fences, ponds and similar structures.”

Paycheck Protection Program Loans to Tennessee
Landscaping Service Firms
The number of PPP loans approved to landscaping service firms by month of approval
is presented in Figure 1. Landscaping service firms in the surveyed states primarily obtained
PPP loan approval in April with 54 percent of all landscape service firm PPP loans, followed
by May (21 percent), June (10 percent), July (9 percent), and August (6 percent). Georgia
received the greatest number of approved loans at 1,533 loans, followed by North Carolina
(1,328 loans), Virginia (1,055 loans), Tennessee (1,055 loans), South Carolina (781 loans) and
Alabama (718 loans).

Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry 2
800

700 August
July 6%
9%

June
600 10%

April
54%
500 May
21%

# of Loans
400

300

200

100

0
April May June July August

AL GA NC SC TN VA

Figure 1. Number of PPP Loans to Landscaping Service Firms, by Month of Approval

The geographical hotspot distribution of the landscaping service firms who received PPP loan
approvals is shown in Figure 2. The hotspot (Getis-Ord Gi*) statistic tool in ArcGIS was used
to generate the maps. The resultant Z score identifies statistically significant spatial clusters
(95 percent) of high values identified as hot spots (red dots) and low values identified as cold
spots (blue dots). The yellow dots indicate that no statistically significant spatial clusters are
identified in those locations. In Tennessee, most of the PPP loans were approved near large
urban areas including Nashville, Memphis and Knoxville. Rural areas identified as cold spots
include Stewart, Henry, Marion and Franklin counties who received fewer loans. This result
is consistent with landscaping service firms being larger and more concentrated in areas
where their customer bases are located (i.e., homeowners and businesses with properties to
maintain). Additionally, higher income households tend to be clustered around larger urban
centers and metropolitan areas (Semega et al., 2020). A similar trend was observed in the
neighboring states (Figure 2). Notably, landscaping service firms near Norfolk, VA, Charleston,
SC, and the suburbs of Washington D.C. in northeastern Virginia had high concentrations of
landscaping service firm loan approvals. The spatial cluster maps of Tennessee and Southeast
U.S. differ slightly because of the higher number of loans approved in Georgia and North
Carolina as compared to Tennessee (Table 1).

Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry 3
A. Tennessee Landscaping Service Firms’ PPP Loan Approval Locations

B. Surrounding States’ PPP Loan Approval Locations

Figure 2. Geographical Distribution of PPP Loans Approved to Landscaping Service Firms for
Tennessee (A) and the Surrounding States (B)

Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry 4
Jobs Retained
The number of jobs retained in the landscape service industry through PPP loans is reported
in Table 1. In total, PPP loans accounted for 28,240 jobs retained in the surveyed states. In
Tennessee, 842 firms received PPP approval for loans with the PPP loans resulting in 4,257
jobs retained or 15 percent of all jobs retained in the surveyed states. North Carolina had a
total of 6,938 jobs retained (25 percent of the total), while Georgia had 22 percent of the total
jobs retained, followed by Virginia, Tennessee, South Carolina, and Alabama.

Table 1. Number of Jobs Retained from PPP Loans to Landscape Service Firms

State Total No. of Loans Total No. of Jobs Percent of Total Jobs
Approved Retained Retained

AL 620 2,555 9%
GA 1,447 6,235 22%
NC 1,074 6,938 25%
SC 675 3,787 13%
TN 842 4,257 15%
VA 688 4,468 16%

TOTAL 6,160 28,240 100%
Note: Only firms that received PPP loan approval and indicated greater than one jobs retained were included in this table.

PPP Loan Amounts
The landscaping service firms in the surveyed six states received approval for $175 million
in PPP loans (Table 2). North Carolina received approval for the most at nearly $42 million,
followed by South Carolina ($38.8 million), Alabama ($28.4 million), Virginia ($27.6 million),
Tennessee ($22.6 million), and Georgia ($15.9 million). The average amount per job retained
was $6,197. Alabama landscape service firms averaged a little over $11,000 per job retained.
South Carolina’s loans were just over $10,000 per job retained, Virginia’s average loan per
job retained was nearly $6,188, North Carolina’s loan per job retained was $6,010, Tennessee
averaged $5,297 per job retained, and Georgia averaged $2,554 per job retained. Georgia
retained the highest number of jobs per PPP loan at nearly 4 jobs per $10,000 approved,
followed by Tennessee (1.9 jobs/$10,000 approved), North Carolina, Virginia, South
Carolina and Alabama.

Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry 5
Table 2. Total PPP Loan Amounts and by Number of Jobs Retained

State Loan Amount Average Loan Jobs Retained Per
Amount Per Job $10,000 Loans
Retained Approved
AL $ 28,403,842.00 $ 11,116.96 0.90
GA $ 15,925,874.00 $ 2,554.27 3.92
NC $ 41,697,024.00 $ 6,009.95 1.66
SC $ 38,771,336.00 $ 10,238.01 0.98
TN $ 22,550,145.00 $ 5,297.19 1.89
VA $ 27,646,012.00 $ 6,187.56 1.62

TOTAL $ 174,994,233.00 $ 6,196.68 1.61
Note: Only firms that received PPP loan approval and indicated greater than one jobs retained were included in this table.

The distribution of the PPP loans approved by amount are presented in Figure 3. Overall, small
loan amounts ($30,000 or less) were the most prevalent in the landscape service industry.
Alabama, Georgia and Tennessee had the largest proportions of loans that were $30,000 or
less with 78 percent, 71 percent and 70 percent of approved loans, respectively. Although
North Carolina and South Carolina had a large portion of loans in this category (59 percent
and 65 percent), they also had larger proportions of their states’ loans in the more than
$30,000 category. Virginia presented an interesting distribution with 17 percent of its loans
being approved in the $125,001 to $150,000 range while 50 percent of the loans were in
the $30,000 or less category.

Note: Only firms that received PPP loan approval and indicated greater than one jobs retained
were included in this table.

Figure 3. Distribution of PPP Loan Amounts Approved to Landscape Service Firms

Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry 6
Summary
Together, the information in this report provides an overview of landscaping service firms’
participation in the PPP and its influence on job retention in this industry for Tennessee and
neighboring states. The PPP serves to mitigate negative economic impacts on small firms
and aid in contributing to economic recovery. In the landscaping service industry, PPP loans
helped retain an average of 5.4 jobs per firm for a total of 28,240 jobs in Tennessee and the
surrounding states. In Tennessee, the program provided nearly $22.6 million to landscaping
service firms which amounted to 4,257 jobs. Seventy percent of the loans approved to
Tennessee landscaping service firms were for amounts less than $30,000 with firms primarily
being located near large customer bases (i.e. urban centers).

Although this report summarizes the PPP loans in Tennessee’s landscaping service industry,
it does not reflect multiplier effects through the state and surrounding state’s economies.
Beyond payroll and operating expenses, PPP loans likely also contribute to local economies
through employee spending and other activities. This information was not analyzed in this
report. Furthermore, the results presented here are only through August 8 and additional PPP
loans will likely be approved in the second wave of the program given the continuation of the
pandemic and its influence on the economy.

References
Diment, D. 2020. “US Industry (NAICS) Report 56173 – Landscaping Services in the U.S.”
IBISWorld #56173.

Rihn, A., and K.L. Jensen. 2020. “Paycheck Protection Program Participation in Tennessee’s
Green Industry April 3-June 30, 2020.” UTIA Extension Publication, W937.

Semega, J. M. Kollar, J. Creamer and A. Mohanty. 2020. “Income and Poverty in the
United States: 2018.” U.S. Census Bureau Current Population reports P60-266 (RV), U.S.
Government Printing Office, Washington DC. Available at: https://www.census.gov/content/
dam/Census/library/publications/2019/demo/p60-266.pdf

State of Tennessee. 2020. “An Order Directing Tennesseans to Stay Home Unless Engaging in
Essential Activities to Limit Their Exposure to and Spread of COVID-19.” Executive Order
No. 22. March 30, 2020. Available at: https://publications.tnsosfiles.com/pub/execorders/
exec-orders-lee22.pdf. Accessed 7/28/2020.

White House. 2020. “Proclamation on Declaring a National Emergency Concerning the
Novel Coronavirus Disease (COVID-19) Outbreak.” March 13, 2020. Available at: https://
www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-
concerning-novel-coronavirus-disease-covid-19-outbreak/. Accessed 7/28/2020.

U.S. Census Bureau. 2018. “2018 County Business Patterns.” Available at https://www.census.
gov/programs-surveys/cbp/data/tables.html. Accessed 11/07/2020.

U.S. Census Bureau. 2020. “New Residential Construction.” Available at https://www.census.
gov/construction/nrc/pdf/newresconst.pdf. Accessed 7/28/2020.

U.S. Department of Commerce, Bureau of Economic Analysis (BEA). “How Does the Paycheck
Protection Program of 2020 Impact the National Income and Product Accounts (NIPAs)?”
Available at: https://www.bea.gov/help/faq/1408. Accessed 7/28/2020.U.S. Department of
Treasury (US Dept of Treasury). 2020.
“The CARES Act Works for All Americans.” Available at: https://home.treasury.gov/policy-
issues/cares. Accessed 7/28/2020.

Paycheck Protection Program Loans in Tennessee’s Landscape Services Industry 7
W 975 1/21 21-0123
Programs in agriculture and natural resources, 4-H youth development, family and consumer sciences, and
resource development. University of Tennessee Institute of Agriculture, U.S. Department of Agriculture and county
governments cooperating. UT Extension provides equal opportunities in programs and employment.

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