East Bay Times
PPP report shows money not distributed evenly
1 percent of borrowers receive a quarter of funds
The Paycheck Protection Program was the centerpiece of the federal government’s relief efforts to keep millions of small businesses afloat during the coronavirus pandemic. But new data shows what many had suspected all along: The money was shared unevenly, with the biggest sums going to a sliver of the companies in need.
Detailed loan information released by the Small Business Administration on Tuesday showed that a mere 1% of the program’s 5.2 million borrowers those seeking $1.4 million and above received more than onequarter of the $523 billion disbursed.
About 600 businesses received the maximum loan amount of $10 million, according to the data. It was the first full accounting of how federal money was spent through the program. Aimed at small companies generally those with 500 or fewer workers the program provided forgivable loans to desperate business owners who were faced with widespread shutdowns.
But the program allowed businesses to take enough money to cover only a couple of months’ expenses, and it has come under criticism for its poorly defined rules and a hasty and haphazard rollout that allowed fraudsters to tap into the money.
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 data on the paycheck program contained only ranges for larger loan amounts and no information about loans under $150,000.
Calling the program “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 companies that received the maximum $10 million PPP loan include dozens of restaurant chains such as Ted’s Montana Grill, TGI Fridays, P.F. Chang’s, Black Angus Steakhouse and Legal Sea Foods. They took advantage of an excep
tion the restaurant industry lobbied for to make chains eligible for the aid money. Prominent law firms also collected loans for $10 million .
Most of the program’s borrowers sought far less: Loans of $150,000 and under accounted for around 87% of the loans made through the program. But those loans made up less than 30% of the total handed out, about $146 billion.