US government refuses to say which small businesses received PPP loans
- The US government declined to share which small businesses received loans under the wage protection program.
- Treasury Secretary Mnuchin told lawmakers the information was considered proprietary and confidential.
- Usually, the Small Business Administration discloses the loans it gives to businesses.
- Visit the Business Insider homepage for more stories.
U.S. taxpayers have disbursed over half a trillion dollars in business loans under the Paycheck Protection Program, but those same taxpayers have yet to find out which businesses have received the money.
Some 438 publicly traded companies have disclosed about $ 1.38 billion in loans in regulatory files, according to FactSquared, which has verified thousands of files. In some cases, large companies have repaid the money (worth just under $ 1 billion) after public backlash forced the Treasury Department to tighten its rules for the program and review requests more carefully.
But for the remaining $ 529 billion in loans that have been distributed, there is currently no public accountability plan. (Some $ 130 billion is still available.)
“We believe this is confidential information, and in many cases for sole proprietors and small businesses it is confidential information,” Treasury Secretary Steven Mnuchin told lawmakers on Wednesday at Capitol Hill. Usually, the Small Business Administration – which oversaw the PPP – discloses the recipients of its loans.
Note on axesIt’s that someone could theoretically deduct individual salaries from loan disclosures, but a competitor would need to know how many employees that company even has to calculate average compensation, let alone individual paychecks. Additionally, PPP loans are based on past salaries, which obviously can fluctuate, and do not include details over $ 100,000.
Some Democratic lawmakers disagree with this logic.
“How do we know which companies still need help if we don’t know which companies have received help? asked Senator Ben Cardin of Maryland.
The move to protect loan recipients from the public eye comes after the government on Thursday reduces the percentage of payroll protection funds that must be allocated to payroll. Now, 60% of the potentially canceled amount would have to go to payroll, the SBA said, which means if a company received $ 20,000 through a loan, for example, and $ 6,000 to cover the payroll, she could then qualify for $ 10,000 in loan forgiveness. .
The employment data released for May could be a sign that the PPP has been a success. That’s something Mnuchin told lawmakers this week, and experts agree.
The unexpected and dramatic increase in employment “is clearly linked to the effectiveness of P3s and other federally funded payroll renewal initiatives,” Dan Alpert, co-creator of the US Private Sector Job Quality Index , Business Insider said.