U.S. Releases Names of Biggest PPP Borrowers -- 3rd Update
July 06 2020 - 12:22PM
Dow Jones News
By Ryan Tracy
WASHINGTON -- The Trump administration Monday disclosed the
names of more than 650,000 businesses that received loans under the
Paycheck Protection Program -- information officials say will show
the emergency fund helped firms across the economy weather the
pandemic.
The data dump will name borrowers receiving loans of more than
$150,000. In all, about 4.9 million small businesses have taken out
the forgivable loans, totaling about $521 billion as of June 30,
according to the Small Business Administration.
Ahead of the data release, the administration Monday released a
new analysis concluding the loans were distributed evenly across
the country, with low- to moderate-income areas receiving 27% of
loans, on par with the 28% of Americans who live there.
The loans went to both rural and urban areas, officials said,
supporting businesses that, as of the time of their application,
reported employing more than 51 million people. Officials said they
lack detailed data about the demographics of borrowers because they
collected that information on a voluntary basis.
More than $30 billion of loans have been canceled after banks
initially registered them with the SBA, a senior administration
official said on a conference call with reporters Monday. Loans
were canceled for multiple reasons, including when borrowers
returned the money, and the returned loans won't be included in the
public data, the official said.
The administration also disclosed that $7.3 billion of the loans
went to religious organizations, along with about $6.2 billion to
other types of nonprofits.
The top sector receiving PPP loans was the health-care industry
at about 13%, followed by professional services, construction and
manufacturing, each of which got more than 10% of the funds.
State-by-state data showed that many of the loans went to more
populated states, with California topping the list at $68 billion.
Texas businesses received $41 billion, New York firms $38 billion
and Florida $32 billion.
The Trump administration for weeks resisted naming any of the
companies that received the taxpayer-guaranteed loans. It said
doing so could reveal confidential business information because
loan amounts are based on payroll.
After pressure from Congress, government watchdogs and others,
officials agreed to name publicly recipients of loans greater than
$150,000. The administration isn't disclosing specific loan
amounts, instead grouping the borrowers into five categories based
on loan size. The large companies named account for about 15% of
borrowers and roughly 75% of the money borrowed.
Separately, the administration is providing the list of all
Paycheck Protection Program borrowers to congressional oversight
committees and the Government Accountability Office, an auditing
agency. It has already shared the data with prosecutors at the
Justice Department. Media organizations including Dow Jones &
Co., publisher of The Wall Street Journal, are suing the government
for public disclosure of the full list.
The PPP was designed for small businesses, generally defined as
firms with 500 employees or less, and to distribute funds at
breakneck speed to address economic fallout from the coronavirus
pandemic.
In an effort to get the funds out quickly, the government
effectively used the honor system: If a company was eligible and
said economic uncertainty made the loan necessary, the loan was
approved. Companies won't have to pay back the funds if they spend
more than 60% on payroll and meet other requirements.
Many business owners say the loans helped them avoid laying off
employees. Many others, however, said the original terms of the
loans -- including a requirement that 75% of funds be spent on
payroll to be forgiven -- were impractical, especially for
businesses with high rent and overhead costs. That requirement was
later reduced to 60%.
Watchdogs have warned that the cursory vetting of borrowers
created a significant risk PPP loans would be misused.
The administration has promised to investigate potential misuse
of the funds in the program, with a focus on loans of more than $2
million. That came after public outcry in the days following the
program's early April launch.
Some of the earliest known recipients, household names such as
the Los Angeles Lakers, Shake Shack Inc. and Ruth's Hospitality
Group Inc., the owner of Ruth's Chris Steak House, received the
funds only to return them later after criticism and threats of
criminal penalties.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
July 06, 2020 12:07 ET (16:07 GMT)
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