New Car Dealers, Charter Schools, Fast Food Among Recipients of "Small Business" Loans in Rochester
by DARIEN LAMEN
(WXIR-Rochester) The Trump administration released data earlier this week about which companies received loans as part of the $660 billion federal Paycheck Protection Program.
While the forgivable loan program was touted as a way to support small businesses during the COVID-19 pandemic, some of the recipients are likely to raise eyebrows.
As the New York Times has reported, new car dealers, high-price lawyers, lobbyists, and Trump family friends are among those "small businesses" who have benefitted nationally. Here in Rochester, recipients include car dealers, charter schools, and fast food chains.
Nationally, the sectors that received the largest number of PPP loans were restaurants, medical offices, law offices, and new car dealers. That trend was echoed here in Rochester as well, where Offices of Physicians (47); Full-Service Restaurants (41), Offices of Lawyers (38), and New Car Dealers (26) received the largest numbers of loans over $150K.
Among businesses that received loans of up to $150K, the largest subgroups in Rochester were Full-Service Restaurants (100); Offices of Dentists (72); Offices of Physicians (44); and Limited-Service Restaurants (38).
The massive data drop will take time to comb through. The actual names and addresses of companies receiving PPP loans were only published for businesses that received loans of over $150,000. The Trump administration says these loans (which top out at $10 million a piece) account for only 24% of PPP loans nationally.
But the data for Rochester paints a different picture. Since April, 46% of the 2,522 loans received by Rochester-area businesses were for amounts over $150,000.
The data also shows that less than 1% of Rochester-based companies that received loans of over $150K were identified as minority-owned, and only 4.2% as female-owned. For businesses that received loans of up to $150K, 1.6% were minority-owned, and 5.7% female-owned.
Small business, big money
While the federal government has depicted the Paycheck Protection Program as a way of helping mom-and-pop stores keep employees on payroll during the COVID-19 pandemic, the latest data shows that high-priced law firms, engineering firms, and large publicly-traded companies have also benefited from the "small business" loans, as have companies that report employing zero people.
To be eligible for the forgivable loans, companies must have 500 or fewer employees and spend most of the money on payroll-related expenses.
Earlier this year, some publicly-traded companies and elite prep schools faced or anticipated backlash after being approved for the loans and decided to return them. Banks are ultimately responsible for determining whether a company qualifies for loan forgiveness.
In Rochester, the top tier of recipients (those receiving loans of between $5 million and 10 million) included architecture giant Bergman Associates and new car dealer Dorschel.
Several Rochester-based companies that received loans for $5 million to $10 million reported having 0 workers, such as temp staffing and executive search firm Employee Relations Associates Inc. It's unclear whether this means banks will allow them to spend the entirety of the loan on non-payroll related expenses.
In 2017, Employee Relations Associates reported adding "50+ professional recruiters and 1200 consultants to the company's growing employee base" following its acquisition of Charlotte NC-based company TalentBridge USA.
In what is likely to ruffle feathers among public school advocates, charter schools in Rochester received somewhere between $4.9 and $11 million in PPP loans. Local charter schools also received nearly $90 million in state funding this year that was redirected from the Rochester City School District budget.
Other revelations in the Rochester data include a loan for between $2 million and $5 million to DiBella's Old Fashioned Subs, a Rochester-based franchise that includes 44 stores in 5 states, according to the company website.
In addition, companies associated with the hospitality and restaurant operator Indus received five separate loans for a total of $1.5 million to $4.35 million. According to the company's website, Indus owns and operates more than 50 hotels and restaurants in the region, including Dunkin' Donuts, Taco Bell, Hampton Inn, Best Western, Baskin Robbins, and KFC. Indus's website states "There are currently more than 900 employees working for the company."
During a recent visit to the Rochester area, Senate Minority Leader Chuck Schumer said the next round of federal PPP loans will be "geared toward" companies with fewer than 100 employees.
The deadline to apply for those loans has been extended to August 8.
DARIEN LAMEN is news producer/director for WXIR Community Radio. He can be reached at email@example.com.