and 97% of small business owners got squat... 94 publicly traded companies got $365M in small-business loans from Paycheck Protection Program https://abc11.com/finance/94-publicly-traded-companies-got-$365m-in-ppp-loans-investigation/6120959/ 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, taxpayer-backed 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." The department has said in written materials that 74% of the loans were for less than $150,000, demonstrating "the accessibility of this program to even the smallest of small businesses." In its review, AP also found examples of companies that had foreign owners and that were delisted from U.S. stock exchanges, or threatened with removal, because of poor performance. Other companies had annual losses for years. Since launching, the relief package has faced criticism about slow loan processing, unclear rules and limited funding that left many mom-and-pop businesses without help. By design, the Paycheck Protection Program was meant to get money out quickly to as many small businesses as possible, using a formula based in part on payroll size. Some businesses with more than 500 employees could qualify if, for example, they met certain size standards for their industries. The owners behind large restaurant chains like Shake Shack, Potbelly, Ruth's Chris Steak House and Taco Cabana were able to qualify despite employing thousands of workers and get the maximum $10 million in loans. Some other big companies that received loans appeared to have enough cash on hand to survive the economic downturn. New York City-based Lindblad Expeditions Holdings, for example, a travel company with 650 workers and a branding deal with National Geographic, got a $6.6 million loan. At the end of March, the business reported having about $137 million in cash on its balance sheet. "When this crisis hit, we had two business planning cases: 1) substantial layoffs and furloughs or 2) receiving these funds and not impacting our employees," spokeswoman Audrey Chang wrote in an email. "Lindblad is the very rare travel company that has not imposed any layoffs, furloughs or salary reductions to date." Five of the companies AP identified were previously under investigation by financial and other regulators, including firms that paid penalties to resolve allegations. Quantum Corp., a data storage company based in San Jose, California, that has a workforce of 800, paid a $1 million penalty last December over allegations that accounting errors resulted in overstated revenues. Quantum received a maximum $10 million loan. Without that loan, "we would most certainly be forced to reduce headcount. We owe it to our employees - who've stuck with us through a long and difficult turnaround - to do everything we can to save their jobs during this crisis," company spokesman Bob Wientzen wrote in an email. That companies listed on stock markets, some with questionable records, received precious financial aid frustrates Zachary Davis, a Santa Cruz, California businessman who runs two artisanal ice cream shops, a beachside café and a taco bar with partner Kendra Baker. Before a shelter-in-place order in mid-March, Davis and his partner expected to pay off in May a $250,000 federal loan they used 10 years ago to open their original shop. "Now it's just all turned upside down," said Davis, who had to lay off 70 workers. Davis and Baker submitted a Paycheck Protection Program application on April 2 - but are still waiting.
Completely absurd. The first place public companies should go for aid is their equity holders. The second place, the bond holders.
The one thing you can ALWAYS count on... ABUSE OF THE TAX PAYER* to the benefit of others. *Remember Odumbo's "shovel-ready stimulus of $800B for infrastructure and jobs"?... and all of the money went to shore up union pension plans!
Im not surprised, this is how the government and crony capitalism operates. Now small business owners know what it feels like and what they're dealing with. People should have been outraged a long time ago as the US has always publically subsidized private corporations.
Privatize profits and socialize losses. Nice scam they got going. 2008 all over again. The reasons change but the corporate hustle remains the same. It'll all trickle down though, really it will. And Epstein killed himself.
3 THINGS: 1. I think people don't realize how difficult it is to roll out a program that was just passed into law and do it effectviely and efficiently without any snags so I give the SBA some leeway when their loan applications annually increased 10x in a matter of 1 week. Same staff and resources but 1 week to do 10x the business. 2. The quote above from Lindblad is typical ignorant bullshit. Lind said they could recieve the funds and not impact their employees but never addressed their working capital situation. Cash on balance sheet is not really dispositive of the issue, working capital is and I am sure they had enough working capital to cover 6.6 million, asshats. 3. Munichin is right that 10% of the loans went to publicly traded companies so the headline misleads a bit that $380 billion went to public companies. Public companies like Shake Shack for example which are franchised end up being thousands of small businesses so if Shack took a loan, was it to distribute to franchisees or for corporate HQ payroll....