PPP data shows how much went to a few
More than a quarter of pandemic relief given to 1% of borrowers
More than 5 million companies received loans under the federal government’s signature relief program for small businesses reeling from the pandemic, but a tiny fraction of those companies gobbled up vast sums of money, newly released data shows.
Detailed loan information released by the Small Business Administration late Tuesday showed that about 600 businesses received loans of
$10 million, the largest available under the $525 billion Paycheck Protection Program. And a mere 1 percent of borrowers received more than one-quarter of the total amount of money disbursed — or around $143 billion in loans of $1.4 million and above.
The data is the first full accounting of how federal money was spent through the PPP, which offered struggling small companies (generally those with 500 or fewer workers) forgivable loans to help them retain workers and keep up with bills like rent and other expenses. The influx of money was a crucial stabilizing force for many businesses fighting to survive amid widespread shutdowns caused by the coronavirus pandemic. But the program has come under criticism for its poorly defined rules and the hasty and haphazard rollout that has allowed fraudsters to tap into the money.
Also included in the data were details of loans made under the Economic Injury Disaster Loan system, a long-standing SBA program that was vastly expanded to offer relief to businesses affected by the pandemic. Together, the two programs spread more than $700 billion to struggling companies in just a few months.
The loan data was released under an order by Judge James Boasberg of the U.S. District Court in Washington, who rejected the SBA’s request to keep the information confidential. Previously released PPP data contained only ranges for larger loan amounts and no information about loans under $150,000.
Calling the PPP “vast in both size and sweep,” Boasberg wrote in a ruling last month that “the weighty public interest in disclosure easily overcomes the far narrower privacy interest of borrowers who collectively received billions of taxpayer dollars in loans.”
The PPP loans were intended to cover up to two months of payroll costs and a handful of other expenses and can be forgiven if companies spent the money mostly on retaining workers.
The companies that received the maximum $10 million loan include dozens of restaurant chains, including Black Angus Steakhouses, P.F. Chang’s, Legal Sea Foods and TGI Fridays, which took advantage of an exception the restaurant industry lobbied for to make chains eligible for the aid money.
Prominent law firms like Boies Schiller Flexner, the high-priced firm run by David Boies, and Kasowitz Benson Torres, founded and run by President Donald Trump’s longtime personal lawyer Marc Kasowitz also collected loans for $10 million. (It was previously known that both firms received large loans, but the exact amount had not been disclosed.)