NOT US, SO FAR!
We did the right thing ... made a good faith effort to obtain DISASTER LOAN ASSISTANCE. When announced on April 4, 2020, our firm was one of the first to file, had our data available within 30 minutes, only to received notices the next day the "site was being updated." Two days later a new site was posted by the SBA which was completely modified and our submitted data disappeared. Again, we submitted a new set of documents and submitted the necessary froms and exgibits for posting, only to be rebuffed by the SBA's software, claiming, "due to unusual volume, please try again." Our third attempt, to our surprise a new form was presented, which we posted and finally accepted on April 9, 2020, with the following notice:
"COVID-19 Economic Injury Disaster Loan
Application submitted, number 3303285507.
You will be notified through the email address you submitted (email@example.com) when we are processing your application. We expect this to take about a week."
The "week" has come and past, and still no response. Meanwhile, $365 million was dispersed, with all the money received by publicly trading firms. Based on our originally filing date, we submitted our application during the first week the programs were approved by Congress. Yet, our Company received nothing, except as stated above.
So much for a level playing field.
Meanwhile, publicly-traded firms get $365M in small-business loans
123 companies disclosed receiving aid since the program opened April 3 were publicly traded, some with market values well over $100 million. And about 25% of the companies had warned investors months ago — while the economy was humming along — that their ability to remain viable was in question.
That's right! By combing through thousands of regulatory filings submitted through Tuesday, identified the 123 companies, or their subsidiaries, as recipients of a combined $365 million in low-interest, taxpayer-backed loans. Nine of the loans were for the maximum $10 million possible, including one to a California software company that settled a Securities and Exchange Commission investigation late last year into accounting errors that overstated its revenue.
The firms getting maximum loans are likely just a tip of the iceberg: Statistics released last week by the U.S. Small Business Administration showed that 4,400 of the approved loans exceeded $5 million. Overall, the size of the typical loan nationally was $206,000, according to the statistics. The SBA will forgive the loans if companies meet certain benchmarks, such as keeping employees on payroll for eight weeks.
On Tuesday, the White House referred questions to the SBA and Treasury Department. The SBA did not respond. Instead, the agency emailed a list
of bullet points including that “loans cited by recent media reports going to large companies comprise less than 10% of the loans made.” Treasury Secretary Steven Mnuchin addressed the issue at Tuesday evening’s White House briefing, saying, “The intent of this money was not for big public companies that had access to capital.”
The department has said in written materials that 74% of the loans were for less than $150,000, demonstrating “the accessibility of this program to even the smallest of small businesses.”
“I am troubled by reports of publicly traded companies with access to capital & bank relationships receiving money quickly while many ma & pa shops can’t even get a callback or $1,” Sen. Martha McSally, R-Ariz., tweeted. “The next round of funds must be focused on small businesses, with better oversight & transparency.”
Democratic House members implored that the new package “equitably prioritize small, minority, veteran, and women-owned businesses” in the future. “If we let the applications for the largest entities consume those one and two-person operations, we have failed our constituents and paved the way for national economic decline,” the leaders of the Congressional Asian Pacific American Caucus, the Congressional Black Caucus, and the Congressional Hispanic Caucus said in a written statement.
We found examples of companies that had foreign owners and that were delisted from U.S. stock exchanges, or threatened with removal, because of their poor stock performance before the coronavirus hit.
Wave Life Sciences USA Inc., a Boston-area biotechnology company that develops new pharmaceuticals, received a $7.2 million loan. Weeks earlier, Wave Life Sciences, whose parent company is based in Singapore, disclosed in its annual report net losses of $102 million, $147 million and $194 million during the last three fiscal years. In an emailed statement, the company said: “The livelihood of our U.S. employees and their families would be severely disrupted if they were to lose their jobs or be furloughed. We are doing everything we can to support them.”
Michael Minnis, who has studied the SBA program like an accounting professor at the University of Chicago Booth School of Business, said he understood the frustrations of smaller businesses that have not received funding when publicly listed companies have. But he said it would be hard to go into the program and change the parameters now. “There’s a fundamental trade-off here between speed and targeting this in the absolute best way,” said Minnis, who estimates the program might need to dispense $720 billion to meet demand.
Since launching, the relief package has faced criticism about slow loan processing, unclear rules, and limited funding that left many mom-and-pop businesses without help. News that the $1.6 billion Shake Shack burger empire had received a maximum $10 million loan ignited public anger. Company executives said late Sunday they would return the money after finding other sources of capital.
Some other big companies that received loans appeared to have enough cash on hand to survive the economic downturn. New York City-based Lindblad Expeditions Holdings, for example, a cruise ship and travel company with 650 workers and a branding deal with National Geographic, got a $6.6 million loan. At the end of March, the business reported having about $137 million in cash on its balance sheet.