I know of a few bussinessessses that have done better due to pandemic conditions that are taking PPP money and no doubt applying for forgiveness.
You can check them out here: Tracking PPP: Search Every Company Approved for Federal Loans - ProPublica
Do you have any interesting anecdotes?
I was checking it, and there are number of bussinesseses I work with
taking PPP money that aren’t doing worse due to COVID
one particular offender took out 4 PPP loans totally almost 300,000 dollars
list 7 employees, but really he only has 1 full time employee (and a few guys he calls up for jobs)
do you have any anecdotes about the: PPP feeding trough?
Point to Point Protocol
Public-Private Partnership
Purchasing Power Parity
Please Pass the Potatoes
Paycheck Protection Program
TLDR: Are you angry about people breaking the rules or are you angry about people getting money when you feel they shouldn’t have. Also, keep in mind, that unless you’ve seen their books, you’re speculating at how well their business is doing.
It should be noted that the original PPP did not take business income into consideration. The second round of the PPP requires a drop in revenue of 25%, IIRC.
We took the PPP and it was forgiven with no questions asked. Our industry survived just fine but we had no idea what was going to happen when the lockdowns started. No one did. I don’t think anyone really could have guessed which industries would be fine, which would thrive and which would fall apart. It’s easy, at least in some cases, to explain things in retrospect, but going into it, we were all pretty blind.
If they followed all the rules, that’s an unfair accusation. If you don’t morally agree with what they did, fine, but having their business do better doesn’t mean they broke any rules other than the ones you made up for them.
While our business was okay, it still gave us the protection we needed to bring on more help, not let people go in departments that actually did tank (ie event catering and wholesaling to restaurants), not fire everyone and close up last March due to an uncertain future etc. In fact, the loan literally asks you to state that you need the money due to ‘current economic uncertainty’, which was certainly the case for all of us.
Having said that, if they broke rules, yeah, that’s a problem and they made things worse, harder and slower for the people that were truly struggling.
Either you’re not understanding the structure of his business(es) or it was outright fraud. There was the original PPP loan and then a second draw (there’s also the EIDL along with it’s recons, and increases). A single EIN, at least as of right now, wouldn’t have been able to take 4 PPP loans. However, someone that has 4 businesses may have been able to. If it’s 4 separate businesses, it’s fine. If it’s one huge business internally separated into 4 distinct businesses, it may be fraud. That’s how some of the big places (ie Ruby Tuesdays, IIRC, was one of them) got PPP loans even though, as a whole, they were bigger than what the SBA allows, but that’s a whole other discussion.
That doesn’t play into the calculations, at least not how I think that you think it does. The PPP uses FTE (full time equivalent) for some of their calculations when it comes to head counts and the amount a business received is/was based on previous year’s payrolls (and owner draws). These are numbers that had been submitted in quarterly reports to the government before covid was even a thing. Just glancing at everything I’ve submitted WRT PPP, I had to send in payroll reports to justify my numbers and copies of 941s and a W3 to substantiate them as well as previous tax returns to prove what they owner had previously taken. Similar forms were required when it was time for forgiveness.
As for the ‘few guys he calls up for jobs’, if they’re employees and on the payroll, then they count towards the loan. If they’re 1099s, off the top of my head, I don’t think they count, could be wrong, we don’t use 1099 workers at my place.
Also, keep in mind, in order to have the loan forgiven, at least before the 3805S, you had to prove to the lending bank and the SBA that you used the funds for ‘eligible expenses’. Any money you didn’t use for eligible expenses wouldn’t be forgiven. Any money received fraudulently (ie fake business, falsified documents etc) got people in a ton of (very public, in some cases) trouble.
That was the case here. Owner applied in good faith, not knowing how the economy and our industry would fare over the next year or two. It was forgiven because those were the terms and probably gave the company a bit of a boost but it wasn’t a scam or attempt to defraud. We honestly just had no idea what was going to happen and the PPP was a “Better apply early if you want it” sort of thing, not a “Wait 18 months to decide if you legitimately need it” thing.
This doesn’t excuse the people who created fake companies to apply for loans. Just that I’m sure a good amount of money went out in goof faith even if not ultimately “needed”.
We called our accountant before we applied and he basically said the same thing. Take the money now, we’ll figure out the details later.
A few months before the start of the pandemic, a friend and two of his friends opened an upscale bar/restaurant. They were going for a tiny, cozy space, the exact opposite of what would work during quarantine. They got some help from the state and barely made it.
I know of a few churches who applied for and recieved PPP funds and it basically saved their hides. I know of a restaurant or two for which this is true as well.
One particular client did better during the pandemic and hired more people. They feasted on 110,000 in PPP.
PPP went to some of the truly needy but abuse and bad-faith applications is absolutley rampant!!!
Rampant: Profusely widespread.
Are you sure about that? I’m willing to believe that there was some abuse, but I haven’t seen enough to make me question the worthiness of the program. At our firm, it was very easy to get a sizable “loan,” and get it forgiven entirely by the terms of the law. We didn’t qualify for round 2, and didn’t apply. We kept every employee on payroll during the pandemic and even paid modest end of year bonuses in 2020.
Abuse/lying/falsification/etc to get the money, sure, we know it happened. But a bad-faith application you’ll have to explain. You keep making these vague statements and not explaining them. Are you suggesting that a business that did better during the pandemic received the PPP money illegally or are you saying that you have an ethical/moral issue with it?
I’ve discussed in another thread that the Stimulus bills are among the greatest financial scams and ripoffs in history. The average middle class person is being effectively saddled with huge debt in the form of their share of newly created federal debt, and in exchange for a few thousand dollars, while a small minority of people made out like bandits.
My nephew told my son that he personally (his wife, actually) profited by over $60K net due to covid. (She has a psychologist practice, which remained open throughout covid, and qualified for PPP, which is most of the money. I assume he is also including various stimulus checks as well.)
I know of a lot of other people in similar positions (e.g. my wife’s friend’s husband etc. etc.).
Rumors are that a certain well-known local multi-millionaire made over $20M in funds, but I can’t confirm that. (It’s not really feasible to look up, because his business interests - like many others of his sort - are spread out among many many smaller entities, each of which would file on its own.)
The PPP loans saved us. I’m an office manager at a small business, a commercial cleaning company. We have employees that clean offices and other commercial buildings in the evenings. We had some customers cancel because their businesses were closed down or they were all working from home. Our accountant (an outside company) took care of the applications and also the paperwork to have the loans forgiven. I don’t think we would have survived without the PPP loans. We’re pretty much back to our pre-lockdown business now.
Of course, whenever there’s money involved there will be fraud.
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The bigger problem with the PPP loans (and the rest of the covid stimulus programs) isn’t the fraud. It was what’s legal.
I’m just wondering if the OP gets paid for all those Ss?