Hundreds of public companies got loans

Funding was intended to buoy small businesses

WASHINGTON – Nearly 400 publicly traded companies received almost $ 1.3 billion in federal forgivable loans meant for small businesses desperately trying to survive the coronavirus crisis, an independent analysis of financial record filings found.

The list of those public businesses that accessed Paycheck Protection Program money includes construction firms, tech companies and pharmaceutical corporations, according to the analytics firm FactSquared.

Several large hotel groups and restaurant chains each obtained loans above the $ 10 million maximum level because they filed more than one application, which is allowable under the Coronavirus Aid, Relief and Economic Security Act that Congress passed in March to rescue the plummeting U. S. economy.

There's no known evidence any of the companies violated the rules of the PPP, which approved more than $ 500 billion in loans during the past five weeks. The money public companies accessed represents a fraction of the roughly $ 650 billion Congress allocated to the program.

But there has been bipartisan outrage after news reports last month that a number of prominent entities, such as the Shake Shack restaurant chain and the NBA's Los Angeles Lakers, got loans while much smaller mom- and- pop stores were shut out of the popular program when it ran out of money last month. Both Shake Shack and the Lakers returned the money.

The program offers firms employing 500 or fewer workers low- interest loans of up to $ 10 million to cover their pandemic- related costs.

Designed to cover eight weeks of expenses such as payroll and rent, the loans do not have to be paid back if at least 75% of the money is spent keeping or rehiring workers. Otherwise, it carries a 1% interest rate and must be repaid within two years.

Large restaurant chains and other hospitality- related businesses were able to access the program – and receive multiple loans – because of an 11th- hour provision included in the coronavirus rescue package that allows loans to certain businesses that may have more than 500 employees but not at any one specific location.

On Friday, Democratic members of the House Select Subcommittee on the Coronavirus Crisis sent letters to several publicly traded firms on the list that received at least $ 10 million, asking them to return the money "immediately" or produce copies of all the records and communication related to their loan application.

"We did not intend for these funds to be used by large corporations that have a substantial investor base and access to capital markets," said the letter, which was signed by the seven lawmakers led by Chairman James Clyburn, D- S. C. "Returning these funds will allow truly small businesses – which do not have access to alternative sources of capital – to obtain the emergency loans they need to avoid layoffs, stay in business, and weather the economic disruption caused by the coronavirus crisis."

One of the firms that received the letter – MiMedx Group, a Georgiabased therapeutic biologics company – announced Friday it was returning the $ 10 million loan.

Another firm said Sunday it would keep the money. Quantum, a video storage technology firm based in California, said returning the $ 10 million loan would result in layoffs.

“We owe it to our employees – who’ve stuck with us through a long and difficult turnaround – to do everything we can to save their jobs during this crisis,” the company said in a statement.