Businesses that didn’t need PPP loans still keep the stimulus money
Almost all of the large state-owned companies that accepted money through the government’s Paycheck Protection Program (PPP) had access to other forms of capital while the coronavirus pandemic was underway, analysis shows from CNBC.
Large state-owned companies are due to return government-provided emergency relief funds by Thursday, May 14, but many are holding onto their loans. According to documents reviewed by CNBC, many of the largest state-owned companies have been able to raise millions of dollars by selling shares or using unused lines of credit.
Such factors should have made them ineligible to participate in the program. However, most SOEs that had access to other forms of capital did not discuss the return of federal funding.
Companies that keep PPP money
Of the $ 1.32 billion in federal funding taken out by state-owned companies in the form of 407 loans, only 61 loans totaling $ 411 million are repaid, according to data analysis firm FactSquared.
CNBC said, for example, that California-based Cutura – which makes beauty devices – raised more than $ 26 million last month by selling shares on the open market and received the money the same day it was sold. PPP loan application. The company could also have kept its business afloat using $ 19.5 million in cash and liquid investments or a $ 25 million line of credit from Wells Fargo.
CNBC discovered that other companies may also have misused federal funds. Some of these companies included OncoCyte, which is developing tests for the early detection of cancer; Xeris Pharmaceuticals, a manufacturer of diabetes drugs; and Applied Optoelectronics, a Texas manufacturer of fiber optic networking products.
In April, the Small Business Administration (SBA) gave businesses two weeks to repay money officials suspect they may not qualify for. Treasury Secretary Steven Mnuchin has warned of the “serious consequences” for businesses that have taken out loans but have not had financial difficulties as so many small businesses are in the midst of the pandemic.