Marcio José Sanchez / AP
Updated Tuesday at 9:31 a.m.ET
Several large restaurant chains, an asset management company, and even the Los Angeles Lakers have repaid the money they received from the paycheck protection program’s first $ 349 billion allocation.
The decision to return the money comes amid complaints that many large companies are falsely accessing a federal loan program intended to help small businesses affected by the coronavirus pandemic.
Again, mmore than 200 other audiences companies keep program money. They include three hotel companies linked to Texas entrepreneur Monty Bennett who have secured a total of $ 69 million from the program.
The program provides loans to small businesses to contain the avalanche of layoffs generated by the lockdown. Loans are canceled if companies retain or rehire workers.
Because the program was put together so quickly, it was not always clear who was supposed to benefit from it, and millions of companies applied.
As a result, the money for the program was gone within two weeks and hundreds of thousands of small businesses were left behind. Congress has approved an additional $ 320 billion to be rolled out starting Monday.
The controversy escalated after reports that some of the money went to major restaurant chains, including Shake Shack and the parent company of Ruth’s Chris Steak House.
Last week, Treasury Secretary Steve Mnuchin pointed out that the program is only meant to help companies that cannot get money through normal channels like the stock exchange.
He said large publicly traded companies would face “serious consequences” if they took money to which they were not entitled.
In recent days, a growing number of companies have refunded the money, including Potbelly Corp., a restaurant chain; the telecommunications company IDT; and pharmaceutical company Aquestive Therapeutics, as well as Chris and Ruth’s Shake Shack.
The Lakers basketball team received a loan of $ 4.6 million but decided to repay it, according to a statement from the team.
“Once we found out that the program funds had run out, we repaid the loan so that financial support was directed to those who need it most. The Lakers remain totally committed to supporting both our employees and our community, “a statement read.
The Lakers are the eighth most valuable sports team in the world, with an estimated value of $ 3.7 billion, according to Forbes.
“I’m not a big fan of the fact that they took $ 4.6 million [loan]”said Mnuchin CNBC Squawk Box Tuesday morning. “I think it’s outrageous.”
Mnuchin said he was happy the team returned the money, “or they would have had some responsibility.”
Manning & Napier, an asset and wealth manager based near Rochester, New York, repaid a $ 6.7 million PPP loan, after the Small Business Administration clarified its guidelines on who could receive it.
But three hotel companies linked to Bennett – Ashford Inc., Ashford Hospitality Trust and Braemar Hotels & Resorts – said over the weekend that they would not refund any money, saying programs like PPP are key to keeping them afloat .
“The COVID-19 epidemic has been devastating for our business and our employees. We’ve been in the hospitality business for decades and have never experienced anything so destructive to our industry. companies said in a report.