As the U.S. Treasury rolled out its latest Paycheck Protection Program (PPP) funding to rescue small- to medium-sized businesses (SMBs), the Los Angeles Lakers returned $4.6 million to the fund, the team said on Monday April (27), according to the Los Angeles Times.
The Lakers, one of the most profitable sports franchises, secured the coronavirus stimulus loan through the Small Business Administration's (SBA) PPP. They were among the big corporations who received the loans from the program's initial $349 billion fund two weeks ago.
“The Lakers qualified for and received a loan under the Payroll Protection Program,” the Lakers said in a statement to ESPN. “Once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need. The Lakers remain completely committed to supporting both our employees and our community.”
Launched on April 3 under the $2.2 trillion CARES Act, the money was intended to provide SMBs with loans to cover employee salaries and other expenses.
Technically, the Lakers were eligible for a PPP loan because they have about 300 employees, ESPN reported. But the team's estimated value was close to $4 billion before the pandemic.
As the PPP ran out of cash in less than two weeks, SMBs complained they were left out, while big, well-known companies were financed.
Among the corporations that received money were Texas Taco Cabana, which has 164 outlets and posted $661 million in sales last year with a net loss of $84.4 million. It received $10 million. Potbelly, which has 474 shops in 32 states with $410 million in revenue last year, received $10 million. Another $10 million went to the coal mine operator Hallador Energy.
Shake Shack founder Danny Meyer and CEO Randy Garutti said last week they will return the $10 million they received. The chain has 189 restaurants in the U.S. and employs nearly 8,000 people. It had $595 million in sales last year with a $20 million net profit in 2019.
Under new guidelines issued last week, the SBA said it will be unlikely that publicly traded companies will receive money from the next round of coronavirus rescue funding.
But on Monday, Sen. Amy Klobuchar of Minnesota and 21 senators urged the Treasury and the SBA to make sure the latest round of PPP funds reach the SMBs that need it.