Us Government Small Business Loans – President Donald Trump and Treasury Secretary Steven Mnuchin participate in a video conference with representatives of major banks and credit card companies about more financial aid for small businesses at the White House on April 7, 2020. Pool/Getty Images
The government’s $349 billion small business loan program was designed to keep merchants afloat during the COVID-19 crisis. But critics say the program’s structure allowed high school graduates to collect aid meant for poor people, shutting out small merchants desperate for cash and giving money to public companies that could have raised money from investors.
Us Government Small Business Loans
While the government has not yet identified the entities that received money under the program, NBC News’ in-depth analysis of nearly 200 recipients raises questions about some of them.
Us Agency Says It Is Out Of Coronavirus Stimulus Money For Key Small Business Loans
The analysis shows that three companies linked to the Trump administration received a total of $18.3 million under the program.
The second borrower received a loan from a bank where the chairman of its board used to work. Four companies received more than $10 million by applying for multiple loans through subsidiaries. Four other companies raising more than $20 million in total share wealthy investor board members.
“The whole program was designed to benefit well-connected, well-banked businesses,” said Amanda Ballantyne, executive director of the small business advocacy group Main Street Alliance. He urged policymakers to change the program to “put real small businesses first.”
The Small Business Administration has said its original program helped more than 1.6 million small businesses in all 50 states. Congress has passed another $320 billion plan.
Secret Service Returns Fraudulent Pandemic Loans To Federal Sba
However, the program ended on April 16, less than two weeks after its launch. Legions of merchants applied for help, hoping to get money to pay for staff, utilities and other operating costs. Many got nothing.
Through public company filings with the Securities and Exchange Commission, NBC News has identified 173 loans totaling nearly $600 million under the program.
At least 15 companies that said they received money under the program have a stock market value of at least $100 million, according to a Morgan Stanley report, although Treasury Secretary Steven Mnuchin said Tuesday that the program is not intended for “large public companies that have access to capital.”
Among them is Zagg Inc., a maker of protective equipment for cell phones, which received $9.4 million. Zagg’s board is chaired by Cheryl A. Larabee, a faculty member at Boise State University’s College of Business & Economics. Larabee was previously a high-level executive at KeyBank, the institution that provided loans to Zagg.
Small Business Grants: Here Are 23 You Can Apply For In 2023
NBC News asked KeyBank and Zagg if Larabee was involved in securing the PPP loan. Jeff DuBois, a spokesman for Zagg, said: “As chairman of the board, Ms. Larabee has no role in financial negotiations, including with KeyBank. These funds will play an important role in keeping our team operating as the economy reopens.”
BK Technologies Inc., a manufacturer of public safety communications equipment. received $2.196 million. Its board shares three executives with another beneficiary, Ballantyne Strong Inc., a holding company that deals in cinema products and digital signage. Ballantyne received $3.174 million under the program.
Denver coal company Hallador Energy, which snagged $10 million under the program, is among those with ties to the Trump administration. Last year, he hired Scott Pruitt, the former administrator of the Trump administration’s Environmental Protection Agency, to lobby on his behalf, disclosure documents show.
Pruitt’s attorney told NBC News, “Please note that any inference that Mr. Pruitt knew or participated in what Hallador may have presented is false.”
Federal Reserve To Buy Small Business Loan Debt, Ease Bank Lending
Pruitt said in an email that he has not been involved with Hallador Energy since May 2019. “I advised and represented them in policy discussions exclusively as an expert on Indiana Public Utilities Commission and Indiana statutes,” he said.
Hallador also has a common directorship with another borrower, Ramaco Resources, SEC filings show. Lexington, Kentucky-based coal producer Ramaco received $8.4 million in the loan program. Ramaco is one of the companies receiving at least $100 million in public-private partnership funding.
Cleveland, Ohio-based holding company Crawford United received a $3.7 million loan. Edward F. Crawford, a member of the company’s board since 2012, was sworn in last June as the US ambassador to Ireland. He resigned from the board at that time.
Flotek Industries, a Houston energy services company, announced that it received a $4.6 million loan. Richard Grenell, Trump’s acting director of national intelligence and ambassador to Germany, had worked as a consultant at Flotek, according to disclosure documents filed in 2017. The records did not say when Grenell was last employed by the company.
Quickbridge Infographic Addresses Challenges Faced By Small Businesses During The Government Shutdown
A Flotek spokeswoman said Grenell was not involved in arranging the loan and that the 118-employee company needs the money because of the weakened oil market and the economic downturn caused by the pandemic.
SEC filings analyzed by NBC News also show three related hotel real estate companies and one restaurant group received more than $10 million under the program. They did this by applying through subsidiaries, which is not prohibited by the rules.
The Dallas-based hotel owners — Ashford Inc., Ashford Hospitality Trust and Braemar Hotels & Resorts — received a combined $58.7 million. The companies, which own hotels across the country, trade separately on the stock exchange and are chaired by Monty Bennett. The companies needed the money because of the sharp decline in the hotel industry and were looking for it “just as the government at the time was going to be a mechanism to help hotel companies that were hit so hard,” said spokesman Jordan Jennings.
The parent company of Ruth’s Chris Steakhouses received $20 million but said Thursday it would return the money.
After Chaotic Start To Small Business Stimulus Program, Fed Steps In As Backstop For Loans
MiMedx Group, the maker of $10 million in skin grafts, is trying to move forward after settling with federal investigators about its accounting and sales practices. Three weeks ago, he agreed to pay $6.5 million to settle Justice Department charges that Veterans Administration-run hospitals overcharged. The agreement did not include an admission of charges.
Former MiMedx CEO Parker H. Petit was Donald Trump’s chief financial officer in Georgia in 2016. Petit has been charged with securities fraud and is awaiting trial in the Southern District of New York. He has pleaded not guilty.
A MiMedx spokeswoman said the loan was “necessary to continue operations” and will not be used to pay the Justice Department’s settlement costs. Petit said in an email that he had nothing to do with his former company receiving a government-guaranteed loan.
Los Angeles-based entertainment group Cinedigm Corp. received $2.15 million in small business loans. The company is controlled by Chinese investment firm Bison Capital Holding Co. Ltd. and the company engages in digital content distribution in China and the United States. The Trump administration has long complained about policies that benefit Chinese companies.
What Did The Fed Do In Response To The Covid 19 Crisis?
When asked for comment on the first round of PPP funding, the Treasury Department referred NBC News to earlier comments from Treasury Secretary Mnuchin and SBA Administrator Jovita Carranza. Mnuchin said at a White House press briefing that one million small businesses with fewer than 10 employees have received support through the PPP. In a press release earlier this month, Mnuchin and Carranza said, “PPP had broad-based participation from lenders of all sizes across the country and from a wide range of industries and businesses. … The vast majority of those loans — 74 percent of them — were under $150,000, demonstrating the program’s reach.” even for the smallest small businesses.
A senior Treasury official noted that Treasury and the SBA launched the program in just one week, and that the SBA had processed “more than 14 years’ worth of loans in less than 14 days.”
Environmental Protection Agency Administrator Scott Pruitt during a hearing on Capitol Hill on April 26, 2018. Brendan Smialowski/AFP – Getty Images file
Some merchants hope the government’s second $320 billion fund could reach more Main Street businesses. This is possible because the new program allocated $30 billion to small banks and community development financial institutions that serve low- and moderate-income communities.
Covid 19 Help With Your Sba Loan Application
Darrin Williams heads Southern Bancorp, a community development institution with operations in Arkansas and Mississippi. His company secured 553 loans totaling $82 million to local businesses under the first PPP program. No one went to a listed company, he said.
Businesses with 1 to 10 employees received 61 percent of Southern’s loans, Williams said. The smallest loan was $600, he added, the largest was $4.2 million.
Borrowers through Southern Bancorp included H & T Truss Mill in Arkadelphia, Arkansas, and A Healthy You Medical Clinic, a minority-owned company in Clarksdale, Mississippi.
Dr. Lula Hoskins and her husband Greg own a medical clinic. Greg told NBC News that the loan through Southern Bancorp meant payroll for their five employees.
U.s. Small Business Bailout Money Flowed To Chinese Owned Companies
“So many people got loans that they didn’t need, and that hurts people like me who are small business owners,” Hoskins said. “We were so lucky. You just don’t know how much it helps
