U.S. Releases Names of Biggest PPP Borrowers
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.
Source: Dow Jones