AP: Publicly traded firms get $365M in small-business loans
Companies with thousands of employees, past penalties from government investigations and risks of financial failure even before the coronavirus walloped the economy were among those receiving millions of dollars from a relief fund that Congress created to help small businesses through the crisis, an Associated Press investigation found.
The Paycheck Protection Program was supposed to infuse small businesses with $349 billion in emergency loans that could help keep workers on the job and bills paid on time. But at least 94 companies that disclosed receiving aid since the program opened April 3 were publicly traded, the AP found, some with market values well over $100 million.
Overall, about 25% of the companies AP examined had warned investors months ago — while the economy was humming along — that they or their auditors had significant doubts about their ability to remain viable and meet their financial obligations.
By combing through thousands of regulatory filings submitted through Monday, the AP identified the 94 companies, or their subsidiaries, as recipients of a combined $365 million in low-interest, taxpayerbacked loans.
Nine of the loans were for the maximum $10 million possible. The size of the typical loan nationally was $206,000, according to U.S. Small Business Administration statistics. If companies meet benchmarks such as keeping employees on payroll for eight weeks, the SBA will forgive the loans.
The list of recipients the AP identified is the most complete public accounting to date, but is still a fraction of the 1.6 million loans banks approved before the program was depleted last week. On Tuesday,
the Senate approved a new relief package adding more than $300 billion. The House was scheduled to vote Thursday.
In the wrangling ahead of Tuesday’s vote, several lawmakers expressed urgent need to get more money to Main Street.
“I am troubled by reports of publicly traded companies with access to capital & bank relationships receiving money quickly while many ma & pa shops can’t even get a call back or $1,” Sen. Martha McSally, R-Ariz., tweeted. “The next round of funds must be focused on small businesses, with better oversight & transparency.”
The SBA did not respond directly to AP’s findings. Instead, the agency emailed a list of bullet points including that “loans cited by recent media reports going to large companies comprise less than 10% of the loans made.”
Treasury Secretary Steven Mnuchin addressed the issue at Tuesday evening’s White House briefing, saying, “The intent of this money was not for big public companies that had access to capital.”