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Who gets a PPP loan?

Back in May, we discussed how some businesses that qualified for a Paycheck Protection Program (PPP) loan were taking heat because they were public companies, franchises of big national chains, venture-backed companies, or some “inappropriate” recipients. In other words, they were not the ones for whom the PPP was intended, even if they did qualify under the law. Some of the “inappropriate” recipients gave their money back. Others did not.

Earlier this week, we learned who some of the PPP recipients were. The Small Business Administration (SBA) disclosed the details of businesses that received more than $150,000 in PPP funding. And to no one’s surprise, businesses with political connections or private equity backing and notable wealthy owners are among the borrowers. I doubt anyone crafting the PPP intended for a company owned by Kanye West to get a loan for $2 million to $5 million. It did get one, though—and apparently, it allowed 106 employees to keep getting paid. That’s good! That’s what the PPP was supposed to do.

I think most of us are interested in knowing where our tax dollars go, whether or not we bother to look up the details. In other words, transparency around the PPP is a good thing (even if it only applied to 15% of the recipients). Likewise, businesses that obtain cheap government loans when they a) probably don’t need them, b) have considerable means to get funding elsewhere, or c) take them in complete contradiction of their principles are worthy of scrutiny.

But I’m sympathetic to the idea that, in this particular moment, keeping people on payrolls is probably the most important thing, especially for small businesses. (Full disclosure: I work for a company that processes small business payrolls and makes money when more people stay on the payroll.) It’s possible to 1) be happy that Kanye’s employees didn’t get laid off because that’s bad on both a macro- and micro-economic level and 2) scrutinize Kanye and/or his business advisors for taking money that he could’ve easily dug up himself.

The PPP was hastily designed, heavily lobbied by special interests, and required numerous clarifications. It didn’t do nearly enough to support economically or demographically diverse businesses. And yes, businesses like Kanye West’s apparel company—probably not what people had in mind—got a loan. But many, many other non-Kanye West businesses got loans, too! Loans that helped them keep paying their employees when they couldn’t work. If they hadn’t, unemployment would be higher, and things would be much worse.

What I’m into this week

For the last few yearsBloomberg Businessweek has published a “Heist Issue” featuring “sordid tales of robberies, scams, and snitches.”

And if titles like: “The Mercenary Who Botched a Maduro Coup Is Lying Low in Florida” and “The ‘Fyre Festival of Pizza’ Wasn’t an Accused Scammer’s First Flop” don’t suit you, then maybe “The Patriots Fan Who Stole the Giants’ Super Bowl Rings” will be up your alley. Here’s a couple of the early paragraphs:

Sean Murphy seethed as he watched from his weed dealer’s couch. It was February 2008. Skinny, with deep-set brown eyes, Murphy was a typical Patriots fan. He pronounced “cars” as “cahs,” got his coffee at Dunkin’ Donuts, and had a mullet and a horseshoe mustache, at least when his girlfriend didn’t make him clean up. He moved furniture for a living in Lynn, Mass., a down-and-out suburb on the North Shore, and on Sundays, when he could get tickets, he made the 40-mile drive south to Foxborough to root for the Pats.

But there was another side to Murph, as his friends called him. On Saturday nights he put on an all-black ninja suit and went out looking for things to steal. He was a cat burglar—the best in a town where burglary was still regarded as an art form.

The stories are pure escapist fun… except for “How the American Worker Got Fleeced.” That one is still a must-read, but it’s a stark reminder of just how lopsided the balance of power between companies and their workers has gotten.

Honestly, you shouldn’t plan to read anything else this weekend. 

Fresh from Gusto

  • PPP was extended, here’s why any businesses that haven’t gotten a loan should consider it.


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Caleb Newquist Caleb is Editor-at-Large at Gusto. In 2009, he became the founding editor of Going Concern, the one-of-a-kind voice on the accounting profession, serving in the role for 9 years. Prior to Going Concern, Caleb worked as a CPA for nearly 6 years in New York and Denver. He lives in Denver with his wife, two daughters, and two cats.
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