SBA and U.S. Treasury Offer PPP Loan Transparency
By Terry Troy
At the beginning of this month, the U.S. Small Business Administration in consultation with the Treasury Department, followed through on its promise last month of greater transparency, by releasing detailed loan-level data regarding the loans made under the Paycheck Protection Program (PPP). This disclosure covered each of the 4.9 million PPP loans that have been made.
“The PPP is providing much-needed relief to millions of American small businesses, supporting more than 51 million jobs and over 80 percent of all small business employees, who are the drivers of economic growth in our country,” said Treasury Secretary Steven T. Mnuchin, in a prepared statement. “We are particularly pleased that 27% of the program’s reach in low and moderate income communities which is in proportion to percentage of population in these areas. The average loan size is approximately $100,000, demonstrating that the program is serving the smallest of businesses.”
“Today’s release of loan data strikes the appropriate balance of providing the American people with transparency, while protecting sensitive payroll and personal income information of small businesses, sole proprietors, and independent contractors.” According to the latest report from the U.S. Treasury Department on loan approvals through July 10, the national loan count stands at 4,907,655 loans representing approximately $517.9 million in net dollars. Ohio’s piece of that pie comes to 140,682 loans representing approximately $18.3 million.
There have been numerous published reports of large companies getting millions of dollars in PPP loans. Indeed, some have even agreed to pay back the government. However, some of these large companies may be entitled to a loan under terms of the program. It’s not a fault of the PPP program, which doesn’t even approve loans, but acts as a guarantor of funds through a loan with a private financial institution.
Still there are some companies and organizations that have received PPP loans that seem at least questionable in their eligibility (at least on the surface), especially companies linked to sports or entertainment celebrities. Now keep in mind, many of these people head companies that may be totally eligible under the provisions of the program. And many own businesses that actually employ people and thus are totally justified in seeking funds through the program. Still…
Floyd Mayweather, the highest paid athlete of 2015 according to Forbes who also made $285 million in 2018, was among the list of folks receiving PPP funding, according to Fox Business. Tom Brady’s TB12 cashed in as well, getting a loan of anywhere between $350,000 and $1 million. Of course, that pales in comparison to the recent two-year, $50 million contract Brady signed in the offseason with Tampa Bay.
Teams in MLS, NASCAR IndyCar and Big Three Basketball all received funds as well. At least four MLS teams were involved in the program.
Even entertainment stars got involved. Twenty One Pilots, the alternative hip hop musical duo from Columbus, received at least $350,000 and as much as $1 million. According to published reports, the application for the federal loan was part of the band and its effort “to do everything in our power to support our crew through these tough times.”
There are other examples as well, the list being too numerous to publish here. No program is perfect, especially programs administrated by a government entity. We must weigh the good a taxpayer-backed program does versus the bad.
But for those of us who wanted to be a part of the rock-n-roll or sports entertainment industry, I guess now we all have a stake.