It was – and is – free money in the form of a canceled loan from the federal government as long as the P3 loan is used for one of the few things – ranging from payroll to mortgage interest on the go. by the rent.
“I hadn’t expected in a million years that the Los Angeles Lakers, who I’m a huge fan of the team, but I’m not a huge fan of the fact that they took a loan of $ 4.6 million, ”Treasury Secretary Steven Mnuchin said. said on CNBC Tuesday morning. “I think it’s outrageous and I’m glad they made it or they would have had a responsibility.”
The Lakers, facing the obvious public outcry in the millions they have received from the government, returned the money Monday night.
So, controversy over. But one question remains: How the hell did the Lakers get to claim a loan that was specifically aimed at helping small businesses bridge the financial gap between the start and (hopefully) end of this period of stay orders at home and extreme social distancing?
* “Any small business that meets SBA size standards”
* Any business, 501 (c) (3) nonprofit, 501 (c) (19) veterans organization or tribal business (sec. 31 (b) (2) (C) of the Small Business Act) with the greater of:
500 employees, or that meets SBA industry size standard if more than 500 “
* “Any business with a NAICS code that begins with 72 (accommodation and food services) that has more than one physical location and employs less than 500 per location”
* “Individual owners, independent contractors and independent workers”
(Note: “SBA size standards” are just a table maintained by the agency that determines who can be called a “small business” by industry.)
Mnuchin said Tuesday morning that the Small Business Administration would conduct “full” reviews of any PPP loan over $ 2 million before that loan was canceled by the government. “I think it was inappropriate for most of these companies to take out loans,” he added.
The Lakers loan is likely to further exacerbate concerns – primarily among Congressional Democrats – about the loan program and how the federal government has distributed the money.
“It has been a dismal failure in the implementation of these laws,” Senate Minority Leader Chuck Schumer (D-New York) said on MSNBC on Tuesday. “They don’t have the trained staff. They don’t have the focus.”
The lesson here? When the government offers out what is essentially free money, businesses – of all kinds – run to get it back, whether or not we are in the midst of a global pandemic.