High-end fashion brands, Hollywood companies, and some of the country's best private schools are among the groups that benefited from the U.S. government's small business bailout, according to a list of recipients released on Monday.
Organizations that took between $ 5 million and $ 10 million from the government's paycheck protection program included well-known law firms such as Kasowitz Benson Torres, who represented Donald Trump, President, and Boies Schiller Flexner.
The announcement comes after months of controversy over whether the job protection program for Americans who work in small businesses has been used as intended.
The recipients of the private school included Choate Rosemary Hall, the elite boarding school in New England where President John F. Kennedy and Ivanka Trump were trained, and Washington's Sidwell Friends, in which the daughters of Barack Obama and Bill Clinton participated as theirs Fathers were in the White House.
Art institutions supported by foundations, including the New York Museums Whitney and Guggenheim and the New York Philharmonic, received loans of over USD 5 million.
This government could act quickly to get funding into the hands of those facing enormous obstacles as a result of the pandemic
Recipients of the luxury fashion brand included New York-based Carolina Herrera, which belongs to the Spanish group Puig and was still worth more than USD 1 billion in 2016, and Vera Wang, who each received between USD 2 and 5 million in government funds .
Rag & Bone, Alice + Olivia and Moda Operandi – the luxury online retailer led by celebrities Lauren Santo Domingo – each received between $ 5 and $ 10 million.
In California, the Francis Ford Coppola Presents holding company received $ 5 to $ 10 million from the government from director Francis Ford Coppola, which includes several resorts, restaurants, and a winery, as did the Gersh Agency – the Hollywood talent agency currently as the sixth largest and once representative of Humphrey Bogart.
Other companies that have received money are Newsmax – the news agency of Chris Ruddy, a confidant and sponsor of Mr. Trump – and Renaissance Acquisition Company, the charity advisor, in which Education Minister Betsy DeVos is involved.
The U.S. Treasury and Small Business Administration announced the names of all organizations and companies that had received more than $ 150,000 from the PPP, the largest program in the federal government's $ 2 billion Cares Act, which was quick Aiming to relieve a blocked economy. They didn't release the exact amount of each loan, but broken it down by reach.
Senior officials said the program kept 51.1 million people in work thanks to loans totaling more than $ 520 billion.
"The PPP is an undeniable success for small businesses, especially for the communities where these employers are the main job creators," said Jovita Carranza, the U.S. small business administrator. "In three months, this government was able to act quickly to get funding into the hands of those facing enormous obstacles as a result of the pandemic."
Steven Mnuchin, Treasury Secretary, said 27 percent of PPP funds went to "low and middle income communities" while the average loan size was $ 100,000.
Critics, however, have pointed to some of the large companies that have successfully made use of the program, even those that were listed or had access to capital that most US small businesses did not have.
By the end of May, approximately 170,000 loans – approximately $ 38.5 billion – had been returned by organizations that did not meet the terms of the loan or were informed that they were not intended to benefit from the program.
The companies that returned the money included the restaurant chains Shake Shack and Ruth's Chris Steak House, which were initially granted $ 10 million and $ 20 million loans, respectively, and the Los Angeles Lakers franchise, who returned the $ 4.6 million loan.
Not all similar companies returned the money. Well-known fast food and restaurant chains that received loans of at least USD 5 million or more included TGI Fridays, Five Guys, Sbarro, Legal Sea Foods and Five Guys.
The SBA and the Department of Treasury claim that the program has left 51.1 million Americans on corporate payrolls based on the employment figures of companies that have received PPP loans. In total, US small businesses employ 59.9 million Americans, according to the US Census.
PPP loan recipients can be forgiven if they primarily use the money to retain or recruit employees. The loans were paid out through the country's banks, which in turn sold many of them to the Federal Reserve.
The largest US bank, JPMorgan Chase, was the largest lender under the program, and arranged for $ 29 billion in loans despite a late launch of its platform. Bank of America, the only major bank ready to accept applications as of the program's launch date on April 3, was the second largest at $ 25 billion.
The data also shows how the big banks tried to work with more than just their biggest borrowers after getting involved in companies like Shake Shack. The average loan amount of JPMorgan borrowers was below $ 108,000, while that of BofA was just over $ 75,000.
Truist and PNC, two of America's largest domestic banks, which lent the third and fourth largest amounts in the program, had average loan sizes of $ 166,000 and $ 179,000, respectively.
Truist and PNC lend almost twice as much as JPMorgan and Bank of America compared to the size of their domestic U.S. business.
Additional reporting from Christine Zhang in New York