Millions of dollars of Paycheck Protection Program funds have not gone to small businesses as White House officials have said the funds were intended, but have been claimed by large companies that are publicly traded.
The program, which is part of the $2 trillion COVID-19 relief package, began accepting loans at the beginning of April and ran out of money last Thursday.
Congress allocated $349 billion to PPP and as of last Thursday, banks and lenders had processed more than 1.3 million loans. An estimated 700,000 small business was in line waiting for funds.
The PPP was designed to get money out quickly to small businesses. The number of loans to be approved was based on a formula using workforce and payroll size. It was aimed at companies with fewer than 500 employees, however, in some cases, the eligibility criteria were expanded, making it possible for some businesses with more than 500 employees to qualify for loans.
Many small business owners are complaining that they had no chance at the funds because larger companies gobbled up the money. Several of those companies have market values in excess of $100 million and many are publicly traded.
The loans are akin to getting free money because they will be forgiven if companies retain or rehire employees.
According to the Small Business Administration, the federal government has allocated at least $243.4 million of the total $349 billion in the program to publicly traded companies, according to a report by lender Morgan Stanley.
According to the Morgan Stanley study, at least 75 public companies were able to get the loans because of a loophole that let some companies count separate locations of the same chain as individual businesses.
The Associated Press is reporting that 97 companies received $365 million with nine receiving the maximum loan of $10 million.
One of the recipients of a $10 million loan, according to the AP, was Quantum Corp., a data storage company based in San Jose, California, that has a workforce of 800. Quantum paid a $1 million penalty late last year over allegations that revenue for the company was overstated due to accounting errors.
Here are some of the companies that have been approved for a loan through the PPP.
- J. Alexander’s Holdings - $15.1 million (has several locations receive loans to equal more than $10 million)
- Fiesta Restaurant Group - $10 million
- Hallador Energy - $10 million
- Potbelly - $10 million
- Quantum - $10 million
- Broadwind Energy - $9.5 million
- ZAGG - $9.4 million
- Air T - $8.2 million
- Wave Life Sciences - $7.2 million
- New Age Beverages - $6.9 million
- DMC Global - $6.7 million
- TRS - $6.7 million
- Lindblad Expeditions Holdings - $6.6 million
- Legacy Housing - $6.5 million
- Veritone - $6.5 million
- Kura Sushi USA - $6 million
- Protech Home Medical - $6 million
- Perma-Fix Environmental Services - $5.7 million
- Escalade - $5.6 million
- Misonix - $5.2 million
- Digimarc - $5 million
- SIFCO Industries - $5 million
- Frequency Electronics - $5 million
- ENGlobal - $4.9 million
- MannKind- $4.9 million
- Aquestive Therapeutics - $4.8 million
- CPI Aerostructures - $4.8 million
- Flotek Industries - $4.8 million
- Emmis Communications - $4.8 million
- Conformis - $4.7 million
- Natural Gas Services Group - $4.6 million
- Optinose - $4.4 million
- U.S. Auto Parts Network - $4.1 million
- Crawford United - $3.7 million
- Vaso - $3.6 million
- PolarityTE - $3.6 million
- Ultralife - $3.5 million
- Adamis Pharmaceuticals - $3.2 million
- Ballantyne Strong - $3.2 million
On Tuesday, the Senate voted to put an additional $484 billion into the Coronavirus Aid, Relief and Economic Security (CARES) Act. Of the $484 billion, $320 billion would go to replenish the PPP. The House is expected to pass the bill on Thursday.
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