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Economics Discuss the largest companies who took Payroll Protection loans meant to help small Biz at the Political Forums; https://www.dailymail.co.uk/ushome/index.html The shameless 40: List of the largest public companies who took Payroll Protection loans meant to help small 'mom ...

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Old 04-22-2020, 11:58 AM
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Default the largest companies who took Payroll Protection loans meant to help small Biz

https://www.dailymail.co.uk/ushome/index.html

The shameless 40: List of the largest public companies who took Payroll Protection loans meant to help small 'mom and pop' businesses survive COVID-19 and avoid mass layoffs



"Loans designed to help small American businesses are being taken by large public companies, many of which have over $100 million in market value. Pictured: A table showing companies in order of market value that have taken millions in tax-backed loans meant for small businesses. Some companies have taken the maximum $10 million allowed under the scheme. Public companies that have received funding from the PPP include metal working giant DMC Global, which has a $405 million market value, biotech company Wave Life Sciences ($286 million), biopharmaceutical company Mannkind ($273m) and Fiesta Restaurant Group ($186 million). Shake Shack, the $1.6 billion burger empire also took $10 million but have pledged to return the funds after facing a public backlash. The fund has since depleted, but will be replenished by the next coronavirus relief fund being negotiated by the U.S. government."
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Old 04-22-2020, 12:02 PM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

I don't blame the companies...

I blame the government that didn't put a cap on the definition of "small business"...
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Old 04-22-2020, 12:14 PM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

Question..

Are these loans real loans, as in will they have to be paid back...?

Or are these more like grants.....?

Some of the airline loans have different terms with the funds that were allocated.....
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Old 04-22-2020, 12:17 PM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

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Originally Posted by Dave1 View Post
Question..

Are these loans real loans, as in will they have to be paid back...?

Or are these more like grants.....?

Some of the airline loans have different terms with the funds that were allocated.....
Don't quote me, but I "believe" the loans become grants if the money was purely used for paying employees...
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Old 04-22-2020, 12:18 PM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

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Originally Posted by Dave1 View Post
Question.….

Are these loans real loans, as in will they have to be paid back...…?

Or are these more like grants.....?

Some of the airline loans have different terms with the funds that were allocated.....
From what I have heard (my wife works for one of these companies), as long as they maintain their payroll at a certain level (not sure what that is) and they use 75% of the money for wages and HC insurance, it effectively becomes a grant. There seems to be some debate as to what percentage of the workforce has to be retained to qualify.

With that said, it does raise some questions. Supposedly this load/grant was enough to cover payroll for 2 months. If the shutdown were to last as some have suggested, up to 4 months, can a business continue to operate and maintain that payroll that long? If they don't, the grant requires that it be repaid. If a company is driven out of business after the original loan was depleted and they have to furlough or let go of their employees, who becomes responsible to repay the loan? Does it just default at that point?

Personally and depending upon the business, I believe it would be very risky to take this loan if the entire economy is not opened soon.
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Old 04-23-2020, 10:22 AM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

Quote:
Originally Posted by Dave1 View Post
Question..

Are these loans real loans, as in will they have to be paid back...?

Or are these more like grants.....?

Some of the airline loans have different terms with the funds that were allocated.....
They are initially loans, 1% interest over 2 years. However, if the company uses 75% of it paying wages (other than officers base wages) and retains or rehires 75% of the employees held prior to the shutdown, the balance of the loan needs to be used for loan interest, rent and utilities. If those requirements are met, the loan may be forgiven.

https://home.treasury.gov/system/fil...Fact-Sheet.pdf
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Old 04-23-2020, 10:25 AM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

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Originally Posted by GetAClue View Post
From what I have heard (my wife works for one of these companies), as long as they maintain their payroll at a certain level (not sure what that is) and they use 75% of the money for wages and HC insurance, it effectively becomes a grant. There seems to be some debate as to what percentage of the workforce has to be retained to qualify.

With that said, it does raise some questions. Supposedly this load/grant was enough to cover payroll for 2 months. If the shutdown were to last as some have suggested, up to 4 months, can a business continue to operate and maintain that payroll that long? If they don't, the grant requires that it be repaid. If a company is driven out of business after the original loan was depleted and they have to furlough or let go of their employees, who becomes responsible to repay the loan? Does it just default at that point?

Personally and depending upon the business, I believe it would be very risky to take this loan if the entire economy is not opened soon.
The formula used was averaged monthly payroll times 2.5, was the basic. So the loans wasn't intended to cover full payroll expenses, but to assist. If the company can't carry any payroll, then they likely shouldn't take the loan, or even continue in business because they were likely already on shaky ground.

I posted it above, but here's a link to a summary: https://home.treasury.gov/system/fil...Fact-Sheet.pdf
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Old 04-23-2020, 10:29 AM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

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Originally Posted by cnredd View Post
I don't blame the companies...

I blame the government that didn't put a cap on the definition of "small business"...
They did put a vague cap: less than 500 employees in one location.

Seriously, that might as well been a red flag with an arrow pointing at a $$ sign.

That said, it's not necessarily a definition of small or large business, but how employee heavy the business is. Some businesses with big $$, have few employees. Others are labor intensive, but not high $$.

I can't say I know exactly what the measuring stick should have been, but obviously it wasn't enough.
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Old 04-23-2020, 12:48 PM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

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Originally Posted by GottaGo View Post
The formula used was averaged monthly payroll times 2.5, was the basic. So the loans wasn't intended to cover full payroll expenses, but to assist. If the company can't carry any payroll, then they likely shouldn't take the loan, or even continue in business because they were likely already on shaky ground.

I posted it above, but here's a link to a summary: https://home.treasury.gov/system/fil...Fact-Sheet.pdf
A company could have been doing well prior to the shutdown, but be devastated by the work stoppage. The company my wife works for, was sold in late 2019 with the new owners taking over on Feb 1 of this year. They were in pretty good shame financially with plenty of money backing the sale.

Business was steady prior to the lock down, but they were doing their best to keep expenses down in order to be in a good cash position to make the loan payments to pay back the loans taken out for the buyout.

But now with the lock down, even though they were deemed essential, most of their customers have shutdown. They are now only doing about 1/4th of the business they were prior to the shut down. They are bleeding cash, but need to keep operating to support those customers that still rely on them.

They worry is that they took the loan to keep those essential employees working as they still need most of them to get the work done (small manufacturing company with different operations). But if this shutdown lags on for another couple of months, their revenues will not come close to covering their expenses and could cause some of their financiers to bail on them. If that happens, they will be forced to shut the doors.

As they took the loan, it only covers their payroll for about a month or so. After that, along with the loan payments coming due, they will be strapped for cash. My guess is that they would have to liquidate their operations to pay back the loans. Bye Bye business.
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Old 04-23-2020, 01:09 PM
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Default Re: the largest companies who took Payroll Protection loans meant to help small Biz

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Originally Posted by mr wonder View Post
https://www.dailymail.co.uk/ushome/index.html

The shameless 40: List of the largest public companies who took Payroll Protection loans meant to help small 'mom and pop' businesses survive COVID-19 and avoid mass layoffs



"Loans designed to help small American businesses are being taken by large public companies, many of which have over $100 million in market value. Pictured: A table showing companies in order of market value that have taken millions in tax-backed loans meant for small businesses. Some companies have taken the maximum $10 million allowed under the scheme. Public companies that have received funding from the PPP include metal working giant DMC Global, which has a $405 million market value, biotech company Wave Life Sciences ($286 million), biopharmaceutical company Mannkind ($273m) and Fiesta Restaurant Group ($186 million). Shake Shack, the $1.6 billion burger empire also took $10 million but have pledged to return the funds after facing a public backlash. The fund has since depleted, but will be replenished by the next coronavirus relief fund being negotiated by the U.S. government."
Yet none of those companies have the $41 Billion that Harvard University has and they took $9 million.
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