Some Smaller Public Cos Opt To Keep PPP Funds

While some of the more than 200 publicly traded companies that received funds from the Paycheck Protection Program (PPP) agreed to return the millions of dollars they received after backlash, many are keeping the money, asserting that it will be used for paying furloughed employees, according to a report by The Wall Street Journal (WSJ).

Cruise operator Lindblad Expeditions received $6.6 million and said it would be keeping the money. The company said it had not furloughed any employees and was badly in need of funds to stay afloat.

The company, which employs 650 people, voluntarily stopped operations in mid-March as the coronavirus pandemic began to escalate in the West. The company had more than $300 million in revenue last year. A spokesperson said Lindblad also didn’t have access to capital.

Then there’s hotelier Ashford Inc., which had one of the largest loans from the PPP, saying it would be using the money to bring back furloughed employees. Now the company has been applying for even more Small Business Administration (SBA) loans, dozens of them, worth around $64.4 million more than it already got from the PPP.

The total amount of loans Ashford has now applied for totals $123 million under the SBA program.

Fiesta Restaurant Group, which owns the Taco Cabana and Pollo Tropical chains, received two loans totaling $15 million, which it is contemplating whether or not to keep. If it decides to keep the loans, Fiesta said it would use them for payroll costs and supporting employees.

Other companies have returned the money. Shake Shack was the first big name to do so, returning a $10 million loan it couldn’t take in good conscience. Ruth’s Chris Steak House returned a $20 million loan after receiving criticism for keeping it initially.

There’s car dealership chain AutoNation, which said it would be returning $77 million it got from the program after applying to try and help its 7,000 furloughed workers.

Pharmaceutical manufacturer OptiNose returned $4.4 million in PPP loan money, and restaurant owner J. Alexander said it would return $15.1 million.

The initial $349 billion allotment of PPP funding ran out in mid-April, but another $310 billion in funding was included in a $484 billion package passed by the Senate and House last week.