NATIONAL NEWS

Gov’t Puts Pressure On Public Companies To Return Loans

Apr 23, 2020, 3:43 PM
FILE: A Potbelly Sandwich Shop in New York City....
FILE: A Potbelly Sandwich Shop in New York City.

NEW YORK (AP) — Big public companies that received loans under a government program intended to help small businesses devastated by the coronavirus outbreak could be forced to return it.

The Small Business Administration issued an advisory Thursday clearly aimed at companies like restaurant chains Ruths’ Chris Steak House and Potbelly that received loans under the Paycheck Protection Program. The guidelines imply that unless a company can prove it was truly eligible for a loan, the money should be returned by May 7.

The PPP, which launched April 3, is intended to help small businesses with fewer than 500 employees stay afloat. The program’s initial $349 billion in funds ran out last week. Congress was debating $310 billion in additional funds Thursday.

Earlier this week, an Associated Press investigation documented how dozens of publicly listed companies collectively received hundreds of millions of dollars of loans from the program’s first round. According to data compiled and analyzed by AP, through Wednesday at least 147 publicly traded companies disclosed receiving $555 million since the program opened April 3. Some had market values well over $100 million. Many had executives that were paid millions each year.

After a swift public backlash, several companies have announced they’re returning their loans, including the burger chain Shake Shack, which got a $10 million loan and Kura Sushi, which got nearly $6 million.

The SBA’s new guidelines require companies to certify with their lender that they need the loan and cannot access the money from other sources. Given that public companies have access to capital markets, the SBA says it is unlikely they “will be able to make the required certification in good faith.”

The initial rules of the program allowed bigger companies such as restaurants and hotels with under 500 workers per location to apply for the loans.

The program approved more than 1.7 million loans. It was clear from SBA data released last week that the agency had approved large loans early in the program, including those that went to big companies. As of April 13, the average size of a loan was nearly $240,000, while by April 16 it had fallen considerably to $206,000 — the result of many more small loans that likely went to small businesses.

Those large loans meant less money was available for small companies including thousands with applications still pending when the money ran out.

On Thursday, the House of Representatives gathered again for a vote on the second tranche of funds. Before that vote, the Small Business Committee held a hearing in which other lawmakers testified to the hardships they were hearing from their home districts.

“We are also aware that at least 90 publicly traded companies got PPP loans and, in some cases, more than one. This is unacceptable, and I have called on the SBA to use its administrative authority now to prevent further misuse,” committee Chairwoman Rep. Nydia Velazquez, D-NY, said in her opening remarks. “Congress will also be exploring ways to address this breach of the public trust in the next relief package.”

KSL 5 TV Live

Top Stories

National News

LOS ANGELES, CALIFORNIA - JUNE 26: Bleu speak onstage during the 2022 BET Awards at Microsoft Theat...
JONATHAN LANDRUM Jr. AP Entertainment Writer

Stars use BET Awards stage to criticize Roe v. Wade ruling

Big stars used the BET Awards stage to strongly criticize the Supreme Court’s recent decision to strip away women’s constitutional protection for abortion.
1 day ago
police, crime, police tape...
Tina Burnside and Jarrod Wardwell, CNN

3 children dead after 911 caller said mother tried to stab them during a house fire in Georgia

Three children are dead and their mother is facing murder charges after allegedly trying to stab her children during a house fire in Georgia.
1 day ago
FILE PHOTO (Idaho State Police/Facebook)...
Michael Houck

Kearns woman killed in two vehicle crash in Idaho

A Kearns woman has died after being hit by a car while on a motorcycle in Idaho Saturday.
1 day ago
A passenger looks through a window at Dubai International Airport on January 01, 2022 in Dubai, UAE...
Chuck Johnston, CNN

More than 700 flights canceled Sunday

At least 730 flights were canceled across the United States on Sunday evening, according to the flight-tracking website FlightAware
1 day ago
Officers respond to the scene after a vehicle fleeing police struck five people in Brooklyn, killin...
Andy Rose and Kiely Westhoff, CNN

Vehicle fleeing police kills a grandmother and injures 4 people, including an 8-year-old

A grandmother was killed and an 8-year-old boy was among four others injured when they were struck by a vehicle fleeing New York police Saturday night.
1 day ago
FILE (Photo by George Frey/Getty Images)...
Associated Press

Tie in Alabama GOP race means winner to be selected by lot

Alabama's Republican Party has declared a tie in the primary race for a state Senate seat and says the winner will be chosen by lot.
1 day ago

Sponsored Articles

hand holding 3d rendering mobile connect with security camera for security solutions...
Les Olson

Wondering what security solutions are right for you? Find out more about how to protect your surroundings

Physical security helps everyone. Keep your employees, clients, and customers safe with security solutions that protect your workplace.
Many rattan pendant lights, hay hang from the ceiling.Traditional and simple lighting....
Lighting Design

The Best Ways to Style Rattan Pendant Lighting in Your Home

Rattan pendant lights create a rustic and breezy feel, and are an easy way to incorporate this hot trend into your home decor.
Earth day 2022...
1-800-GOT-JUNK?

How Are You Celebrating Earth Day 2022? | 4 Simple Ways to Celebrate Earth Day and Protect the Environment

Earth Day is a great time to reflect on how we can be more environmentally conscious. Here are some tips for celebrating Earth Day.
Get Money Online...

More Ways to Get Money Online Right Now in Your Spare Time

Here are 4 easy ways that you can get more money online if you have some free time and want to make a little extra on the side.
Lighting trends 2022...

Lighting Trends 2022 | 5 Beautiful Home Lighting Trends You Can Expect to See this Year and Beyond

This is where you can see the latest lighting trends for 2022 straight from the Lightovation Show at the Dallas World Trade Center.
What Can't You Throw Away in the Trash...

What Can’t You Throw Away in the Trash? | 5 Things You Shouldn’t Throw in to Your Trash Can

What can't you throw away in the trash? Believe it or not, there are actually many items that shouldn't be thrown straight into the trash.
Gov’t Puts Pressure On Public Companies To Return Loans