Five publicly traded companies have until midnight on Monday (May 11) to return their Payroll Protection Program (PPP) loans or explain why they should be allowed to keep the money by Friday (May 15).
In a letter from the newly created House Select Subcommittee on the Coronavirus Crisis, the panel demanded that the large firms give back the taxpayer funds intended to rescue small businesses impacted by COVID-19.
“Returning these funds will allow truly small businesses which do not have access to alternative sources of capital to obtain the emergency loans they need to avoid layoffs, stay in business and weather the economic disruption caused by the coronavirus crisis,” the panel wrote.
Signed by House Chairman James E. Clyburn (D-South Carolina) and the other Democrats on the panel, the letters were sent to Quantum, a California technology company; EVO Transportation and Energy Services, a Phoenix transportation firm; Texas consulting firm Gulf Island Fabrication Inc.; Universal Stainless & Alloy, a Pennsylvania steel manufacturer; and Georgia-based MiMedx Group Inc., a biologics company.
According to the committee, these firms received loans of $10 million or more while having a market value in excess of $25 million and more than 600 employees, and failed to meet Congress’ intention for these funds to be used by SMBs.
Congress crafted PPP as part of the $2.2 trillion stimulus package to reduce the impacts of the coronavirus on small and medium-sized businesses.
Hours after the letter was issued on Friday (May 8), MiMedx said in a press release that they will repay their loan in full. The other four companies did not respond to PYMNTS’ calls and emails seeking comment.
A Quantum spokesperson told CBS News at the time that the company qualified for the money under the Small Business Administration's definition of a small business. “The PPP loan is saving jobs at Quantum," the spokesperson said. "Without it, we would most certainly be forced to reduce headcount.”
Last month, PYMNTS reported that U.S. Treasury Secretary Steven Mnuchin said it was inappropriate for some large companies to take these loans, and he was pleased that some have returned the money.
A spokeswoman for the House Select Subcommittee told PYMNTS the panel is only aware of MiMedx’s pledge to return the loan.