“This program was far from perfect, but it did a lot of good in the economy,” said Isaac Boltansky, director of policy research at Compass Point Research & Trading. “The uneven launch, the confusing messages and the stories that will come out of this new data are simply the cost of putting so much money into the system so quickly.”
The revelation triggered a revolt. Kyle Herrig, president of the watchdog group Accountable.US, said his organization “will have a team of investigators carefully studying the data.”
The publication marked the largest revelation to date of the record amount of bailout funds authorized by Congress during the coronavirus outbreak. It has huge consequences for lawmakers as negotiations on the next financial aid package begin, including additional support for businesses. Lawmakers say they want to target aid to the most affected employers, but have had little visibility into where the first wave of money went.
“We cannot blindly extend the program,” Nydia Velazquez (DN.Y.), president of small business in the House of Representatives, said Wednesday.
Lack of transparency was a political obstacle last week before Congress passed a law to keep the program open to new loan applications until August 8. It closed on Tuesday night but restarted on Monday morning after President Donald Trump signed the extension over the holiday weekend.
The SBA and the Treasury have agreed to give congressional committees full access to loan data, and news organizations are seeking greater access under the Freedom of Information Act.
As of Tuesday, the program had issued $ 521.4 billion through nearly 4.9 million loans, leaving more than $ 131.9 billion unspent, according to a summary of data the SBA released Monday. The data the Trump administration revealed this week did not include the more than $ 30 billion in loans that were returned or canceled, senior administration officials said. Many companies repaid the loans after the SBA and the Treasury discouraged corporations from taking the funds if they had access to other financing.
Loans can be forgiven if companies agree to keep their payrolls, and Monday’s data release showed borrowers reported that the loans supported 51.1 million jobs. About 27 percent of approved funds went to low and moderate income areas. In an industry breakdown, healthcare and social assistance companies received the bulk of the loan funds – about $ 67 billion.
The administration plans this week to release two segments of loan data. One set will include the details of loans of less than $ 150,000 but will not include the identities of those borrowers. The other set of loans above $ 150,000 will name which companies and nonprofits took the largest loans.
The large corporate borrowers that came to light in the early days of the program through presentations by the Securities and Exchange Commission fueled the debate about who deserved the help. Those concerns decreased as the demand for loans declined and tens of billions of dollars went unused. But the employers who took the money were preparing for a second wave of public outrage.
Representative Vicky Hartzler (R-Mo.) Revealed Thursday that her family’s businesses received about $ 480,000 in loans from the Paycheck Protection Program, after she declined to disclose the details.
“It’s different now with money still in the fund,” said Ian Katz, director of research firm Capital Alpha Partners. “But there is still some public relations risk if the companies are named and perceived to be too large for PPP or to be able to raise funds in other ways.”
