The Latest: Payday lenders in line for government virus aid
NEW YORK (AP) — The Latest on the Treasury decision to identify hundreds of thousands of businesses that received funding through the Paycheck Protection Program, created to preserve jobs at smaller businesses during the coronavirus pandemic. Under the PPP, Congress created $659 billion in low-interest loans that will be forgiven if employers use the money on payroll, rent and similar expenses. The public may never know the identity of more than 80% of the nearly 5 million beneficiaries to date because the administration has refused to release details on loans under $150,000. That secrecy spurred a lawsuit by news organizations including The Associated Press:
Roughly 120 payday lenders and auto title lenders took loans from the Paycheck Protection Program. Most took out smaller loans, typically less than $350,000. These types of businesses typically lend money to poor and disaffected individuals in desperate need for cash, often at high interest rates.
Online lenders which often offer to consolidate loans in return for high fees also took government loans. Avant, Prosper Marketplace and Upstart were among them.
Creditcorp, a high interest-rate lender and debt collector, took out a loan of between $5 million and $10 million loan.
Nearly 600 portfolio management companies and private equity firms took money from the PPP program.
Private equity firms and portfolio managers were not an industry heavily impacted by the coronavirus pandemic. Their employees were largely able to keep working, and they were not industries that had to be shut down by state or local government orders. Investment managers and private equity firms also tend to be extremely well paid positions.
According to the data, those 583 companies reported saving roughly 14,800 jobs collectively with the funds from the program. That’a an average of 25 employees per company.
Rosenblatt Securites, one of the biggest names on the floor of the NYSE, took out a $1-$2 million loan.
Some familiar political names are showing up in data revealing who received funding for businesses during the outbreak.
Waterville Valley Holdings, an investment group led by the family of New Hampshire Gov. Chris Sununu, got a loan of between $350,000 and $1 million. The company is the principal investor in the Waterville Valley Resort, a ski area where Sununu, a Republican, served as CEO until just before he took office in 2017.
Robin J. Vos Enterprises, a popcorn manufacturing company run by Wisconsin Assembly Speaker Robin Vos received between $150,000 and $350,000. Vos is a Republican.
Vos’ spokeswoman, Kit Beyer, didn’t immediately respond to a message inquiring about why the company was seeking the money and how it’s been used.
A company owned by Ohio Gov. Mike DeWine is among those that received loans from a $600 billion-plus coronavirus aid program.
Data released Monday shows DeWine Seeds-Silver Dollar Baseball received a loan under the Small Business Administration’s Paycheck Protection Program for a range of $150,000 to $350,000. The company owns the Asheville Tourists, a minor league baseball team in North Carolina, which was purchased by the governor’s family in 2010. DeWine’s son, Brian DeWine, is the president of the baseball team.
The Treasury Department released the names of more than 700,000 companies that received funds from the government’s small business lending program.
That program was put into place to support businesses as states shut down in April to contain the coronavirus outbreak. The Treasury to date had identified just a fraction of all borrowers, naming only those companies that received more than $150,000.
But those firms made up less than 15% of the nearly 5 million small companies that received loans.