Public Companies took much more small business loans than first thought
Even as the U.S. small business relief program is about to reopen Monday with fresh funding, the complete extent that public companies tapped the emergency facility is merely now becoming clear.
More than 220 public companies applied for a minimum of $870 billion from the govt programme that was billed as for little businesses without access to other sources of capital, according to Washington D.C.That includes $126.4 million for three public companies affiliated with Texas hotelier Monty Bennett. One of those firms, Ashford Hospitality Trust, applied for $76 million in 117 separate loans, the foremost by one company, consistent with regulatory filings.
Governments Pay-check Protection Program initially gave out $350 billion allotment which ran out comparatively fast as it was revealed that the big companies took loan which was actually for small businesses running out and then they were left with tiny amount of monetary resources from here and there. This incidence was an eyeopener for the government as these issues couldn’t have been resolved clearly having the situation in mind and need of the hour for U.S.
Last week, the Small Business Administration attempted to close that loophole, saying that big public companies “with substantial market value and access to capital markets” aren’t eligible and that firms that already tapped the fund had fortnight to return the PPP money.
Small businesses, already hammered by the corona-virus pandemic, can’t seem to catch a break.
On the primary day of the reopened Pay-check Protection Program, a key lifeline from Congress, banks are reporting that the tiny Business Administration’s portal isn’t working. But amid pressure, 13 companies have returned $98 million to the Pay-check Protection Program so far. And hoping to receive the leftover money as soon as possible so that the amends which are needed could be made.
When reached by CNBC last week, several companies said they had no intention of returning the funds, claiming that they had limited access to other sources of money and the program would help them to pay their employees.