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NEW YORK (AP) — Congress has earmarked $659 billion to throw a lifeline for small businesses and organizations affected by the coronavirus pandemic and to help paychecks keep flowing to workers who might otherwise fall. head towards the unemployment line.

However, that’s not exactly how it happened. Among the 650,000 businesses on the partial list of recipients released Monday by the Treasury Department were fashion designers such as Oscar de la Renta, clothing retailer Candie’s and companies that own hundreds of fast food restaurants, including PF Chang’s and TGI Friday’s.

While many companies are in industries hard hit by state and local government shutdown orders, they also have deep pockets or the backing of private equity firms. All have obtained loans of several million dollars.

Loans have also been extended to private equity firms, venture capital firms, law firms and other companies that may have felt an initial pinch from the economic downturn, but seem better positioned to weather the storm than small businesses, including some that didn’t get loans. program design issues.

“While the intent of the program should be applauded, the implementation of the program was fraught with inconsistencies and this outcome could have been predicted,” said Katie Vlietstra, vice president of the National Association of Freelancers.

The PPP offered loans of up to $10 million to businesses with fewer than 500 employees. The most attractive aspect of the program: the possibility of loan forgiveness if most of the money was spent on the workers. Otherwise, the loan had to be repaid, with an interest rate of 1%.

Big companies didn’t break the law when they applied for loans. The law that created the program did not cap the amount of income a potential borrower could have, and a business could get a loan even if it had access to credit elsewhere.

This is why, according to some experts, large companies with dedicated accountants and lawyers would have been foolish not to take advantage of the program. Even though they ended up repaying the loans with 1% interest.

“It was a cash gift. Who wouldn’t ask for it?” said Bob Phibbs, a retail industry analyst.

Boddie-Noell Enterprises, which owns 346 Hardee’s restaurants, received between $5 million and $10 million, the government said. The Rocky Mount, North Carolina-based company has more than 10,000 employees.

“We asked for the PPP because it was created specifically for payroll and potentially offered much more favorable terms than a traditional bank loan,” Boddie-Noell spokesman Rick Rountree said.

But when the loans were first offered, lawmakers described them as a bailout for small businesses and their employees. Outrage followed as big players secured money in the program’s first round of funding, while many smaller companies were left on hold as the initial $349 billion dried up.

In April, shortly after the loans began, news broke that large, well-funded corporations, including two publicly traded restaurant chains, Ruth’s Chris Steak House and Shake Shack, and the NBA’s Los Angeles Lakers had obtained loans. Many companies returned the money under pressure from the public and the Treasury Department; the government said $30 billion in return funds included money sent back by those companies.

Treasury Secretary Steven Mnuchin was quick to say the government would audit loans over $2 million, although some experts had doubts.

“The SBA will have its work cut out in terms of reviewing loans to ensure these recipients are in full compliance,” said Karen Kerrigan, president of advocacy group Small Business & Entrepreneurship Council.

The government did not release exact loan amounts on Monday, but listed companies within a range. PF Chang’s China Bistro said its $5 million to $10 million loan helped keep 12,000 workers employed as it transformed its more than 210 restaurants into takeout. The Scottsdale, Ariz.-based company said it used the money for employee salaries and benefits.

PF Chang’s is owned by private equity firm TriArtisan Capital Advisors. The same company owns TGI Friday’s, which owns or franchises more than 500 restaurants across the country and has secured a loan of between $5 million and $10 million. TGI Friday’s said the forced closures left it with no more than 20% of its revenue and the loans allowed it to rehire furloughed employees.

Muy Brands, a San Antonio, Texas-based owner of more than 750 Wendy’s, Taco Bell and Pizza Hut franchises, received between $15 million and $30 million between three entities. CEO James Bodenstedt is also a major donor to President Donald Trump, according to federal campaign finance records. Neither company responded to requests for comment.

The Small Business Administration issued a caveat alongside the data that companies on the list may ultimately not be considered eligible for loan forgiveness. Also, according to the agency, some companies on the list may have been approved for loans but did not actually receive the money.

Congress increased the program to $659 billion at the end of April. There’s about $130 billion left. Congress extended the program until August 8.

“It would have been a much bigger problem if they had run out of money because all of a sudden the little tailor asked for $2,000 and couldn’t get it because he was taken by companies. publicly traded,” Phibbs said.

The list also included well-known fashion and retail names whose revenues have plummeted amid store closures across the country. Among them: Iconix Brand Group, a publicly traded company that owns the Candie’s, Joe Boxer and Ed Hardy brands, which received between $1 million and $2 million. He did not respond to a reporter’s request for comment.

Untuckit, which has 85 shirt stores, received a loan of between $5 million and $10 million; the company said it was using the money to continue paying its workers. High-end designers Oscar de la Renta, Carolina Herrera and Vera Wang, who collectively employ 300 people, each secured loans in the range of $2 million to $5 million. None of the companies responded to a request for comment.

Private equity firms that buy and sell businesses priced in the millions of dollars were also on the Treasury list. Aliera Companies, a private equity firm specializing in healthcare, secured a $5-10 million loan. Aliera said the loan would help “pay our more than 250 employees during these difficult and uncertain times”.


AP Business Writers Dee-Ann Durbin in Detroit and Ken Sweet in New York contributed to this report.