Most publicly traded companies keep US small business assistance loans
NEW YORK / BOSTON (Reuters) – More than four-fifths of publicly traded companies that have received emergency small business loans from the U.S. government have kept them, sticking to a certification that they need the money, according to data from market research firm FactSquared.
Companies that should not have applied for the loans because they had enough resources to fend for themselves had until May 18 to return the money without incurring penalties. Those who returned the money announced it through regulatory deposits, which are required within four business days of a major corporate event.
Sixty-eight companies repaid $ 435.8 million in loans, out of a total of 424 state-owned companies that obtained loans totaling $ 1.35 billion, based on a review of documents filed by FactSquared as of May 22. .
Some 76 state-owned enterprises that took out PPP loans and did not say they would repay them had enough cash and cash equivalents to cover operating costs until at least June, according to an analysis by Reuters, based on the most recent earnings from companies and companies tracked by FactSquared. Of these companies, 22 received loans of at least $ 2 million.
The loans were made under the Paycheck Protection Program (PPP) run by the Treasury and the Small Business Administration, which was created by Congress to help small businesses cope with the economic fallout from the coronavirus epidemic.
A spokesperson for the Treasury declined to comment.
The PPP program has drawn criticism from small business owners and politicians for allowing access to state-owned enterprises, given their easier access to capital markets.
Companies applying for PPP loans had to certify in “good faith” that “[c]The current economic uncertainty makes this loan application necessary to support the applicant’s ongoing operations.
The Treasury and the SBA said they would review loans over $ 2 million to make sure the companies that received them really needed them.
Reporting by Joshua Franklin and Lawrence Delevigne in New York; Editing by Steve Orlofsky