Treasury Secretary Steven Mnuchin speaks as U.S. President Donald Trump and White Home senior adviser Ivanka Trump pay attention throughout an East Room occasion highlighting Paycheck Safety Program (PPP) loans for small companies adversely affected by the coronavirus illness (COVID-19) outbreak, on the White Home in Washington, U.S., April 28, 2020. REUTERS/Carlos Barria
NEW YORK/BOSTON (Reuters) – Greater than four-fifths of publicly listed corporations that obtained emergency small-business loans from the U.S. authorities have held onto them, sticking with a certification that they want the cash, based on information from market analysis agency FactSquared.
Firms that ought to not have utilized for the loans as a result of they’d sufficient assets to get by on their very own had till Could 18 to return the cash with out dealing with any sanctions. People who returned the cash introduced it by means of regulatory filings, that are required inside 4 enterprise days of a significant company occasion.
Sixty-eight corporations returned $435.eight million in loans, out of a complete of 424 public corporations that had been granted loans totaling $1.35 billion, based mostly on a evaluate of company filings by FactSquared as of Could 22.
Some 76 public corporations that took PPP loans and haven’t mentioned they may return them had sufficient cash and cash equivalents to cowl working prices till at the least June, based on a Reuters evaluation, which was based mostly on corporations’ most up-to-date earnings and corporations tracked by FactSquared. Of these corporations, 22 obtained loans of at the least $2 million.
The loans had been made below the Treasury and Small Enterprise Administration-run Paycheck Safety Program (PPP), which was created by Congress to assist small companies address financial fallout of the coronavirus outbreak.
A spokesman for the Treasury declined to remark.
The PPP program has drawn criticism from small-business house owners and politicians for permitting entry to public corporations, given their simpler entry to capital markets.
Firms that utilized for PPP loans needed to certify in “good faith” that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
The Treasury and the SBA have mentioned they may evaluate loans of greater than $2 million to verify corporations that obtained them had been actually in want.
Reporting by Joshua Franklin and Lawrence Delevigne in New York; Enhancing by Steve Orlofsky