The federal government’s Paycheck Protection Program has been billed as a lifeline for small and independent businesses, but big businesses are also reaping millions from the scheme.
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“The vast majority of these loans—74% of them—were for under $150,000, demonstrating the accessibility of this program to even the smallest of small businesses,” Treasury Secretary Steven Mnuchin said in a joint statement with the Small Business Administration. “We think that the PPP will be of interest to our REIT clients because it should be a resource for tenants and borrowers to obtain funding that is expressly designed to be used to pay rent and debt service," the law firm Clifford Chance said in a briefing last month."Additionally, REITs may wish to use funding under the PPP for their own payroll expenses.
But in the case of REITs, it’s desperation—not greed—that has pushed them into pursuing PPP loans, said Chip Rogers, the CEO and president of the American Hotels & Lodging Association, a hospitality industry trade group. Kelleher agrees. “I find it hard to believe that any actual financial analysis of these companies could genuinely satisfy a certification of necessity,” he said.“Although our companies are publicly listed, they do not have access to this volume of emergency funding from the capital markets that we believe we need during this crisis due to their relatively small market capitalizations,” Ashford Inc. said in a statement to ABC News.
The SBA is allowing borrowers to return funds which may have not been “necessary" to sustain their businesses by May 7 without penalty. Mnuchin also announced Tuesday that the government will audit any business that takes out a loan over $2 million before it can be forgiven.
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