Tuesday, July 7th, 2020
The full name of the program, that maybe we don’t hear often enough, is the Paycheck Protection Program. It’s operated out of the Small Business Administration. It is supposed to supply small businesses with loans to keep employees on the payroll…here, here’s the official wording:
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. Click here to read more about PPP loan forgiveness.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).
- PPP loans have an interest rate of 1%.
- Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
- Loan payments will be deferred for six months.
- No collateral or personal guarantees are required.
- Neither the government nor lenders will charge small businesses any fees.
Sounds pretty good as these things go, right? And then we heard stories about not-so-small businesses, some very large businesses who applied for and got large loans.
And then the Secretary of the Treasury was being all circumspect about who was actually getting these things.
But as the New York Times reported today:
We now know the names of many of the businesses that received small-business rescue loans, after a huge data dump yesterday by the Trump administration, which had initially fought to keep the details secret. […]
Here are some of the recipients of PPP money that may raise eyebrows:
• Investment firms that manage billions, including Semper Capital Management, Domini Impact Investments and Brevet Holdings.
• At least 45 major law firms, including Boies Schiller Flexner, Kasowitz Benson Torres and Wiley Rein.
• Some companies connected to federal lawmakers or their families, including the Republican representatives Markwayne Mullin and Devin Nunes and the Republican senator Susan Collins (whose brothers’ business later returned its loan), as well as Ms. Collins’s Democratic challenger, Sara Gideon.
• Several start-ups that still laid off employees.
• The Ayn Rand Institute, which is dedicated to the anti-statist philosopher, and an arm of Americans for Tax Reform, the group founded by the famously anti-tax activist Grover Norquist.
Yee-gads. I was pleased when someone took the data and created a site where you could easily browse the loan grants for here in atlanta (or anywhere.)
A lot of the loans were for modest amounts ($150-350k) and a lot of them were for familiar restaurant LLCs around town. And, ah, there’s our dentist, keeping her staff on board when they couldn’t see patients. There’s the company who did tree work for us. But then, down into the Cs, I spot a familiar large Atlanta law firm, Cooper Carry. Wow, $5-$10 million, with an eye to retaining 325 jobs. Churches. Car dealers. King of Pops, the Atlanta fancy popsicle people, got $350K to $1 million to help retain 40 jobs. King and King Law, $350K to $1 million. Their listing says (this may be wrong) jobs retained: 0.
So when is a small business not a small business? In some ways I want to see as many of my neighbors and the places they work protected through this process, and this certainly seems like…a way. But would direct payments make more sense, especially when some of the loan recipients (it seems) are not directly transferring the money to payroll.
One guy on Twitter, with all the succinctness that 280 characters affords said “forgive the rent, forgive the mortgages, forgive the property taxes, pay a monthly check for expenses, and medicare for all” which inevitably (and appropriately) gets into a discussion of fair wages, fair rents, and fair health care.