The Paycheck Protection Program (PPP) was part of a stimulus plan supposedly meant for the little guy—the mom-and-pop shops struggling to survive amid a pandemic-spurred economic meltdown.
Instead, giant chains like Ruth’s Chris Steak House, Shake Shack, and Potbelly (those with estimated net worths sometimes reaching into the billions) each received tens of millions of dollars in federal loans that were supposed to be reserved for small businesses needing help to stay afloat.
After a barrage of criticism, some of these companies have promised to return the funds, and Congress has unleashed a second round of cash with the expectation that small businesses will actually get a deservedly greater slice this time. But the fact that this happened in the first place is cause for concern. History, it seems, is merely repeating itself once again—subsequently deepening the racial, economic, and social fissures in this country. Here are the key takeaways.
Are PPP funds still available?
The initial April 3 launch was messy, rushed, and capped off with controversy. A New York Times investigation revealed that more than 200 publicly traded companies received over $750 million in loans.
The Intercept found that major donors to President Donald Trump’s reelection campaign scored large sums. Data analyzed by Reveal and the New York Daily News determined that more than half of businesses in GOP-controlled states were approved for loans, while blue states hardest hit by the pandemic (California and New York) were approved at a rate of less than 20 percent.
In fewer than 14 days, 14 years of loans were gobbled up, leaving Main Street shut out of the $349 billion in emergency relief earmarked for them.
Why? PPP loans were designated for companies with fewer than 500 employees—but corporations that have multiple locations but don’t employ more than 500 employees at each location could qualify.