Some publicly traded companies that received taxpayer-backed small business loans to pay their employees during the early weeks of the pandemic paid out millions to Wall Street investors in dividends and share buybacks, publicly available financial disclosures reviewed by the Washington Post show. Under the Small Business Administration rules, a PPP loan could be used only to meet payroll and pay mortgage interest, leases or utility bills. PPP loan recipients weren’t prohibited from paying investors with other funds, as long as the PPP funds were kept separate. Still, some advocacy groups believe companies that had enough cash on hand to pay millions in dividends and stock purchases were unlikely to qualify for the PPP program, which was designed to assist troubled companies in keeping employees on the payroll during weeks when they were unable to do business because of pandemic-related lockdowns. The issue of whether some undeserving businesses received PPP loans has arisen previously when it became known that scores of publicly traded companies received millions of dollars in loans, even though they had access to other sources of capital. The SBA’s initial rules allowed for businesses to self-certify that “current economic uncertainty” made the loan “necessary to support the ongoing operations of the applicant.” But in late April, after the news broke that many publicly traded companies had received loans, the SBA said firms with access to capital elsewhere were “unlikely” to qualify and asked that the loans be returned. Some returned the money, but many did not (SBA and Treasury officials have declined to say exactly how many did so).
