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More than 200 publicly traded companies tapped the government-backed small business rescue program, applying for hundreds of millions of dollars in coronavirus aid, according to a new analysis.
At least 222 public companies received forgivable loans totaling more than $870 million through the Paycheck Protection Program, which Congress created last month to help small businesses survive the tandem health and economic crises, according to Washington D.C.-based data analytics firm FactSquared.
That includes $126.4 million received by three public companies overseen by luxury hotelier Monty Bennett. One of the companies, Ashford Hospitality Inc., applied for $76 million in aid in 117 separate loans, according to regulatory filings, making it the top recipient of the money.
In a statement, Ashford Inc. said it did not intend to return the taxpayer money.
“Although our companies are publicly listed, they do not have access to this volume of emergency funding from the capital markets that we believe we need during this crisis due to their relatively small market capitalizations,” the company said, adding: “The PPP program was specifically designed to help companies like ours as part of the national objective of shoring up businesses and getting people back to work. We do intend to use the PPP funds to do our part.”
The loan program, which relaunched Monday morning, exhausted its initial $349 billion in funding within 13 days and was criticized heavily for granting loans to big, publicly traded companies — even as small businesses languished.
The Small Business Administration has since tried to close a loophole that allowed wealthy companies to secure loans, tightening the rules and pressuring public companies that tapped the fund to return the money. Companies applying for the relief must now certify that the loans are necessary and prove they can't turn to another source for help.
The agency told businesses to take into account their “current business activity and their ability to access other sources of liquidity” to support their operations before turning to the PPP. If borrowers accessed the aid before the Treasury issued the new guidance and repay the entire loan before May 7, 2020, it “will be deemed by the SBA to have made the required certification in good faith.”
According to the data, only 13 loans worth about $98.5 million have been returned so far. Among the notable companies that have canceled the loans are Shake Shack, Potbelly Corporation and Ruth’s Hospitality Group. That money will be returned to the pot and made available to companies in the program’s second round of funding.