Small business loans from COVID-19 relief fund went to over 200 publicly traded companies
MONTGOMERY, Ala. (WSFA) - The National Federation of Independent Businesses reports that at least $870 million in Paycheck Protection Program loans meant for small businesses impacted by COVID-19 went to 200 large publicly traded companies.
“This money would have kept the lights on and payroll current for tens of thousands of true small businesses and their employees, and the news that it didn’t is outrageous,” said NFIB President Brad Close in a statement. “Small businesses are suffering through an economic shutdown in which they had no say and these funds are crucial to their survival.”
These funds could cover, for example, nearly 13,000 small businesses with five employees and average salaries of $65,000 per employee, according to NFIB research.
Rosemary Elebash, NFIB Alabama State Director, said that was money that small businesses desperately needed.
“The average loan that these publicly traded companies got was $2.4 million. That was money that did not go to a small independently owned business on main street and that is very troubling,” Elebash said.
According to Morgan Stanley, as reported by CNBC, the U.S. government has distributed at least $243.4 million of the total $349 billion to publicly traded companies.
On March 21, the Small Business Administration released its first-come-first-serve PPP loan program to provide financial relief for the nation’s smallest businesses. Its purpose was to keep employees on payroll and prevent mass layoffs across the country. Congress approved the PPP loan as part of the $2.2 trillion CARES Act.
That first round of PPP funding ran out of money on April 16, and many small business owners were left with no money or not enough.
The question now is what’s next for these small businesses?
On Friday, April 24, President Donald Trump signed into law a $484 billion COVID-19 rescue bill.
The bill includes $310 billion in new money for the SBA second PPP loan program rollout.
SBA’s second PPP loan program opened Monday at 8 a.m.
“I certainly hope no more publicly traded companies are able to access those loans, and that they go to where they were intended to go. It was to keep Main Street open, not Wall Street,” Elebash said.
Shortly after the second round of loans became available, the Alabama Bankers Association reported that few banks- if any- are able to access SBA’s E-Tran system to upload loans.
“Bankers from all over the state are reporting that they cannot access the Small Business Administration’s E-Tran system to upload loans for the Paycheck Protection Program,” ABA President and CEO Scott Latham said in a statement. “The SBA assured our nation that its system would be prepared for loan transmittals to begin this morning, and it was not. Despite the agency’s efforts to be ready, it has failed. Bankers worked throughout the weekend in anticipation of E-Tran being ready to accept new PPP applications and will continue to stand ready so that much-needed funding can be provided to small businesses across Alabama.”
Now Alabama bankers must wait anxiously for SBA to accept the loans, so these small businesses can finally receive this much-needed funding.
Links to resources for small business owners seeking help should visit this link.
For employers unfamiliar with which banks or credit unions are offering the program, the SBA provides a link to search for eligible PPP lenders by Zipcode.
The U.S. Treasury has also posted an FAQ list with answers to three dozen of the most-asked questions about the PPP loan program.
Copyright 2020 WSFA 12 News. All rights reserved.