New detailed data on the Small Business Administration's Paycheck Protection Program (PPP) loans from earlier this year show that huge chain restaurants and prominent law firms enjoyed more than a quarter of the loan monies made available, while small businesses and independent restaurants shared the rest of the pot and received far smaller sums.
In what's just the first shoe to drop regarding what are likely to more revelations about the inequities of the PPP loan distribution process, a federal court in Washington state got its hands on the first full accounting of where PPP money went. As the New York Times reports, the breakdown of loan details reveals how just 1 percent of the total number of borrowers received over a quarter of the money available — $143 billion of the $525 billion distributed. And 600 companies walked away with potentially forgivable loans of $10 million, the largest loan amount available.
Among the companies that got $10 million checks in the mail were huge restaurant chains like P.F. Changs, Black Angus Steakhouse, TGI Friday's, and Legal Seafoods, and also huge law firms like Boies Schiller Flexner (the firm of prominent attorney David Boies who helped argue the Prop 8 case), and Kasowitz Benson Torres, a firm founded by President Trump’s longtime personal lawyer, Marc E. Kasowitz.
And most egregiously, as NBC News reports, 25 loans totaling $3.65 million went to business tenants with addresses at Trump- and Kushner-owned properties, and 15 of those reported keeping only one employee or zero employees on the payroll.
Meanwhile, in a demonstration of great inequity that may lead directly to the demise of restaurants scenes across the country, 87 percent of the loans made in the program were for $150,000 or less — with the stipulation that the majority of the funds needed to be used to keep staff on the payroll.
For most San Francisco restaurants who received them, these loans helped them stay afloat and perhaps break even doing takeout and then outdoor dining for a few months. But after the program ended in August and loan funds were required to be used by late October, most small businesses — especially in the hard-hit hospitality industry — are left figuring out how to stay alive, while huge national law firms that could probably have stayed in business through the pandemic without such help walked away with huge gifts from the federal government.
The new data on loan recipients will also prompt anger and plenty of questions from businesses that were denied loans, or businesses that were not able to secure a loan before all the money was spoken for. The entire program begins to look haphazardly run and without proper concern for the kinds of businesses that needed the money most.
Reportedly, $130 billion of money under the program remained unspent when it expired in August. A second round of PPP loans may be coming if a second stimulus package finally makes its way to a congressional vote, and the Times notes that this round will be more focused on the hardest-hit businesses.
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