It’s a loophole that, in theory, was meant to help franchisees and independent owners - think a local McDonald’s store owner - but as Bloomberg notes, the “language didn’t clarify whether individual locations must apply for the aid or whether corporate headquarters could start vacuuming up millions in relief funds.”Īlthough Sen. What’s particularly stunning about corporations’ efforts to capitalize on this program is that the law is designed to let them do it.Īs written in the legislation, any business that’s classified as an accommodation or food service that has 500 or fewer employees at its individual locations, is eligible. The program was designed to give corporations access “I am outraged the PPP money has gone to publicly traded companies with fancy bankers, lobbyists, and lawyers who pushed them through,” said Beret Kirkeby, the owner of an orthopedic massage clinic in New York City, who hasn’t been able to receive any funds from PPP. Given how much small businesses are relying on the funds in these loans, the amount of money that large corporations have been able to pick up is staggering - and, to many people, infuriating. The program’s distribution of funds is a direct result of the way the law - which explicitly enables large chain restaurants and hotels to participate in the program - was designed. Hundreds of thousands of small-business owners are still waiting to even hear back about the status of their applications, not to mention access funds. She’s since applied through other lenders, including PayPal, but money for the program was depleted before she ever got an update, and she’s been forced to furlough her 21 employees in the meantime.Ĭore’s experience underscores the financial pressure that many small businesses are currently facing: According to MarketWatch, 43 percent of small businesses have said they could close permanently within six months if they don’t receive financial help. “I’m in a position where I don’t even know if we’ll make it.”Ĭore applied to the program on April 3, the first day it opened, but was told her bank - Golden Pacific Bank - had already reached its limit on the number of loans that it could give out. “Our business is completely shut down right now,” Core told Vox. Small-business owner Sara Core, meanwhile, hasn’t been able to get the comparatively paltry $58,000 she’s asking for to cover payroll and other operational expenses for the Millennium Family Entertainment Center she runs in Yuba City, California. ( Shake Shack and Ruth’s Chris have since returned their loans in the wake of massive backlash.) Millions more have also gone to large, publicly traded companies whose financial troubles have nothing to do with the coronavirus economic crash, the AP reports. As the $349 billion for a federal small-business loan program has run out, an alarming pattern has emerged: Much of this money hasn’t been going to small businesses at all.Īccording to public filings, corporations including Ruth’s Chris Steak House, Potbelly, and Shake Shack have obtained millions in loans from the Paycheck Protection Program, a new effort intended to help small businesses that are struggling to weather the economic fallout from the coronavirus pandemic.
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