An organization in Georgia paid $6.5 million to resolve a Justice Department investigation — and, two weeks later, obtained a $10 million federally backed mortgage to assist it in surviving the coronavirus disaster. One other firm, AutoWeb, disclosed the final week that it had paid its chief government $1.7 million in 2019 — per week after it received $1.4 million from the same mortgage program.
And Intellinetics, a software program firm in Ohio, bought $838,700 from the federal government program — after which agreed, the next week, to spend not less than $300,000 to buy a rival agency.
The vast economic rescue package that President Trump signed into legislation last month included $349 billion in low-curiosity loans for small companies. The so-known as Paycheck Protection Program was supposed to assist forestall small corporations — usually these with fewer than 500 staff in the US — from capsizing because the economic system sinks into what seems to be like an extreme recession.
The mortgage program was meant for firms that would now not finance themselves by way of conventional means, like elevating cash within the markets or borrowing from banks below present credit score strains. The legislation required that the federal money — which comes at a low 1 p.c rate of interest and, in some instances, don’t must be paid again — be spent on issues like payroll or hire.
Some, together with restaurant chains like Ruth’s Chris and Shake Shack, agreed to return their loans after a public outcry. However, dozens of huge, however, decrease-profile firms with monetary or authorized issues have additionally obtained giant payouts underneath this system, in keeping with an evaluation of the higher than 200 publicly traded corporations that have disclosed receiving a complete of greater than $750 million in bailout loans.
One other dozen or so collected cash, although they’ve not too long ago reported with the ability to elevate massive sums employing non-public means. Several others have lately showered high executives with seven-determine pay packages.
The federal government isn’t disclosing who receives help, leaving it as much as particular person firms to determine whether or not to reveal that they obtained loans. That makes a full accounting of the mortgage program not possible.