More than 200 companies applied for funding from the Paycheck Protection Program that was billed for small businesses.
According to CNBC, data analytics firm FactSquared said public companies received more than $860 million from the PPP. The program was designed to help small businesses stay afloat during the coronavirus outbreak.
However, the program ran out of $350 billion in less than two weeks as major hotel and restaurant chains received funds.
More than $120 million went to three public companies affiliated with Texas hotelier Monty Bennett. One of Bennett’s companies, Ashford Hospitality Trust, applied for $76 million in 117 separate loans. Ashford has already announced it will not return $69 million it received.
“Media concerns over our receipt of PPP funds are misplaced. The PPP program was specifically designed to help companies like ours as part of the national objective of shoring up businesses and getting people back to work,” the company said in a statement.
Ashford added it will use the funds to protect jobs after furloughing or laying off more than 90% of its workforce.
After substantial backlash from small business owners and lawmakers across the country, the SBA changed the requirements. Now, large public companies “with substantial market value and access to capital markets” aren’t eligible and that firms that already tapped the fund had two weeks to return the PPP money.
Since then, Shake Shack, Potbelly, and 11 other companies have returned $98 million they received back to the PPP.
Another issue with the PPP is reports of banks including JPMorgan Chase and Bank of America giving better treatment to bigger companies.
According to some small businesses, bigger companies received better treatment than small mom-and-pop businesses, leading to allegations that lenders unfairly prioritized some clients.
Congress added $310 billion to shore up the PPP, and demand is expected to be high when it reopens Monday. The Small Business Administration also told lenders Sunday that it would place entries into its loan portal and capped any single bank to 10% of the dollars in the program.