Let's hope the right people get PPP loans during Round 2
As the old saying goes, the rich get richer.
The $2 trillion CARES Act stimulus package passed by Congress to help residents and businesses avoid financial ruin during the COVID-19 pandemic included a Payroll Protection Program which authorized up to $350 billion in forgivable loans to small businesses to pay their employees.
The program was primarily designed to help mom-and-pop shops keep paying their employees.
The PPP allotment ran dry earlier this month and sparked outrage against some large public companies that received the assistance.
Of that $350 billion of the PPP loans, the government allocated at least $243.4 million to publicly traded companies, according to research from Morgan Stanley.
That’s the part of the CARES Act coronavirus relief bill that was supposed to help small businesses keep employees on their payroll. Help that was only supposed to go to businesses with fewer than 500 employees because they have relatively few financial resources.
Some business and institutions of higher learning took millions of dollars even though they didn’t need it.
Harvard University, which has an endowment of $40 billion (that’s billion), took nearly $9 million, but in a tweet last week said it was returning the money.
Many major businesses did the same. Companies such as Ruth’s Chris Steak House and Shake Shack, with combined annual revenue of nearly $600 million, applied for and accepted $10 million in PPP loans, then sheepishly turned around and returned the money they had borrowed.
That’s money those in Butler County who are out of work because of the pandemic and struggling to pay bills and keep food on the table could have used.
Blame for large companies and wealthy universities receiving these loans falls squarely on Congress.
Congress devised the illogical formula to allocate funds to institutions of higher education. It is the one that chose not to include guardrails on which universities received funds.
Certainly, all these public companies are hurting. So are all businesses in virtually every industry. But pushing others out of the way to protect yourself can mean condemning them, who might have found critical help from a slice of the $20 million that Ruth’s Chris or $10 million to Shake Shack received, to fiscal annihilation.
Congress approved another $310 billion for PPP loans and $60 billion for disaster loans last week. The program is set to resume Monday, according to the Small Business Administration.
Let’s hope the people who really need the money get it this time.
Your neighbor. Your butcher. Your local small business. Those who truly are in need.
