The issuance of PPP loan beneficiaries reveals worrying patterns


After months of litigation between the Small Business Administration and news organizations seeking news about pandemic relief programs, the agency released a comprehensive dataset of all small businesses that received a Paycheck Protection Program (PPP) or an Economic Injury Disaster (EIDL) loan on Tuesday night.

The data reveals the most complete account to date of the more than $ 700 billion in forgettable loans introduced by Congress and the Trump administration in the spring for eligible expenses, including payroll, rent, utilities, and mortgage interest.

The first analysis by NBC News, one of eleven newsrooms suing the disclosure, raised questions about the fairness and distribution of loans. The program benefited from properties owned by the Trump Organization, as well as President Donald Trump’s son-in-law, Jared Kushner’s family at the Kushner firms. The data show:

  • More than 25 PPP loans, worth more than $ 3.65 million, were received by businesses with Trump and Kushner real estate titles, paying rent to these owners. Fifteen of the properties themselves reported having only one job, zero jobs, or no number at all.
  • Among the loans for the Trump and Kushner properties were a $ 2,164,543 loan to Triomphe Restaurant Corp., located at the Trump International Hotel & Tower in New York City. The company reported that the money was not used to keep jobs. It closed later.
  • A company called LB City Inc, located at the Kushner’s Bungalow Hotel in Long Branch, New York, received a loan for $ 505,552.50, which it used to preserve 155 jobs.
  • Two tenants of Trump Tower at 725 5th Avenue received more than $ 100,000 and retained only three jobs.
  • Four tenants of Kushner-owned 666 5th Avenue received more than $ 204,000 and retained only 6 jobs.

There were also worrying signs of mismanagement in Tuesday night’s data release. More than 100 loans were granted to companies that did not include a business name, were listed as an “unavailable name,” or showed potential data entry errors, such as names that appear to date or phone numbers. More than 300 companies appear to have received more than $ 10 million in loans through their subsidiaries. Businesses should not have received more than $ 10 million per unit, except for those operating in the food, hospitality or hotel industries.

The results immediately raised concerns with government accountability groups.

“Many months later, with unfulfilled promises, the court ordered the release of this crucial data while the Trump administration stands with one foot in the door, a shameful lack of duty and an explosive mismanagement of a program that millions of workers and small businesses had to get through this epidemic.” said Kyle Herrig, president of Accountability.US, which oversees accountability.

Original intention

The original intentions of PPP program officials were to help small businesses payroll, which is struggling with the effects of the corona virus closure. The loans are intended to build a bridge over the summer in hopes of a better economic and health climate in the fall.

But almost from the beginning, the programs, especially the PPP program, have been critical of the way administration and messaging are handled, as well as fairness.

Initially, large national banks only provided loans to customers with whom they had previously had reciprocal relationships. Businesses owned by colorful people without strong banking connections found themselves with limited access and forced them to look for other ways to get financing. There has also been the constant question of what defined “small business” after lobbying by the hotel and catering industry increased the maximum number of employees to 500, even though more than 98 percent of U.S. small businesses have less than 100 employees.

The administration tried to resolve the complaints, for example by setting aside a day for smaller community banks to apply for loans. But even that has suppressed SBA computer systems. All of these contradictions have increased the pressure for transparency.

But unlike previous government rescue programs, the agency has previously issued less detailed versions that claim to have omitted the company names and addresses of borrowers borrowing less than $ 150,000 for privacy reasons. Instead of specific loan amounts, the loans were classified into provinces.

Mixed answers

The SBA defended its management of the program when it released its data Tuesday night.

“The SBA’s historically successful COVID aid loan programs have helped millions of small businesses and tens of millions of U.S. workers when they needed it most,” an SBA spokesman said in a statement accompanying the release.

But as government accountability groups sifted through the data late into the night and uploaded it to publicly searchable databases like SearchPPP.com, they expressed regret over what had happened to many small businesses, in part because of the mismanagement of the loan program.

“It is only now – after his hand has been forced, hundreds of thousands of small businesses have gone down and millions of taxpayer dollars have been wasted – that administration has pulled down the curtain to expose behind-the-scenes malfunctions,” Herrig said. “Americans deserved an open, transparent small business support program when this pandemic began, and any new small business assistance program must learn from the failures that result from it.”