While some PPP beneficiaries have raised eyebrows, most remain secret
Kanye West’s fashion brand. Investment firms that manage billions. Businesses tied to the Trump family and owned by prominent lawmakers. The Church of Scientology.
The Small Businesses Administration’s (SBA) massive data dump that included the names of over 650,000 Paycheck Protection Program (PPP) recipients revealed no shortage of eyebrow-raising beneficiaries of the taxpayer-funded, potentially forgivable loans. But oversight advocates say they fear it’s just the tip of the iceberg.
Earlier this week, the SBA released information on nearly 5 million loans made through the program, but it withheld identifying information for businesses that received less than $150,000 in funding -- which account for over 80% of loans made through the program and roughly a quarter of money lent through the PPP.
"As the largest stimulus program in our nation’s history, PPP must receive proper oversight and transparency," John Arensmeyer, the founder and CEO of the small business advocacy organization Small Business Majority, said in a statement. "The survival of America’s small businesses depends on the full disclosure of PPP’s successes and failures."
Public data on the smaller loans that went out to the vast majority of mom-and-pop businesses could show holes in the program's reach, advocates argue, particularly in the face of data showing that the wealthy and well-connected received millions of dollars in loans while some small business owners who applied for PPP received less money than they applied for, or never received any at all.
Both the SBA and Treasury Department faced bipartisan pressure to release information on PPP loans. Treasury Secretary Steven Mnuchin initially told lawmakers in June that no borrower information would be revealed, contrasting with standard SBA practices for traditional lending programs, before later changing course and saying some data would be released to the public and certain congressional committees would be granted access to all recipient names and loan sizes.
Mnuchin said in a press release that the data unveiled by the SBA this week "strikes the appropriate balance of providing the American people with transparency, while protecting sensitive payroll and personal income information of small businesses, sole proprietors, and independent contractors."
But Senate Minority Leader Chuck Schumer sees it differently. He called the release a "good start" in a statement, but added that "more transparency is still needed to ensure that these taxpayer dollars went where Congress intended -- to the truly small and underbanked small businesses."
For Kejuana Isom, the owner of Keke's Love Is Care, a home day care facility in University Park, Illinois, the information the SBA did reveal was enough to be disheartening. When Isom applied for a PPP loan back in April, she requested roughly $2,000 for her and her two employees -- a drop in the bucket of the $513 billion program that still has $134 billion left in the bank. But Isom was denied the loan because of her credit, despite a CARES Act provision that waived credit requirements.
"I've always felt as if it's about who you know and that hasn't changed. This just proves my theory, it's all about who you know," Isom said, reacting to the news of administration officials, members of Congress and celebrities netting PPP loans.
"[Kanye West] may have needed it -- I don't know, I can't count anyone else's money. I can only count my own money, and I know that I needed it," Isom said.
While businesses far larger than hers survive off the forgivable loans, Isom has to decide whether she can even remain open through the end of the month. Before she closed down her day care center in February, she cared for six children, ranging in age from a few months to 2 years old.
"I'm trying to think about whether I'm going to close, which I really don't want to do. That's my passion," said Isom, who is a mother of four. "I love watching children. And I can't really get out there and look for a job because no one is really hiring," she said.
For the last few months, Isom has supported her family with the boosted $600 per week of unemployment insurance from the CARES Act, but it's set to expire in late July unless Congress extends it.
Like other minority business owners who have been hit especially hard by the economic devastation of coronavirus, Isom, who is Black, said she's "frustrated" and "disheartened."
"I'm just trying to plan my Plan B and Plan C. That didn't work out so I have to move on," Isom said. "We're survivors, I guess."
The Trump administration, meanwhile, has used the data release as an opportunity to hail the PPP’s success.
"Today’s data shows that small businesses of all types and across all industries benefited from this unprecedented program. The jobs numbers released last week reinforce that PPP is working by keeping employees on payroll and sustaining millions of small businesses through this time," SBA Administration Jovita Carranza said in a statement this week.
However, the information released on the loans appears to show that over 90,000 recipients did not specify how many jobs the PPP funds would support. A more accurate estimate on how many jobs the program may have actually saved will not be attainable until more businesses begin applying for loan forgiveness, which requires demonstrating that employees were maintained or quickly rehired.
Small-business advocates like Arsenmeyer say more information on PPP loans is also needed to determine if the funding was equitably distributed to minority-owned businesses and to paint a full picture of who may have been cut out or shortchanged in the lending process.
"Sunlight has always been the best disinfectant, and we cannot allow those small businesses that were grossly underfunded or disadvantaged by the program to disappear and not have their stories told and rectified," Arsenmeyer said.
