Bay Area corporations receive billions in federal funding during pandemic, yet appear not to retain employees
SAN FRANCISCO (KGO) -- Billions of taxpayer dollars intended for small businesses are now in the hands of big Bay Area corporations, according to the ABC7 I-Team analysis, and hundreds appear to have failed reporting requirements.
Data released from the Small Business Administration this week revealed which companies received billions of funding through the Paycheck Protection Program or PPP.
The ABC7 I-Team found 11,931 corporations received at least $4.9 billion in federal loans intended for small businesses. The program launched in early April with the intention of helping small businesses stay afloat amid impacts from the pandemic.
"It was very narrowly focused looking at the payroll and trying to help businesses keep their employees paid," said SBA District Director Julie Clowes.
RELATED: I-TEAM: Wealthy Bay Area private schools receive millions in PPP funding
Yet, according to the data released this week at least 730 corporations, including dozens of tech companies and several employment agencies, reported retaining zero employees. ABC7 reached out to several corporations that received the most funding, but have yet to hear back.
ABC7's Stephanie Sierra: "730 corporations reported retaining zero employees is a lot. Could there be another explanation?"
Clowes: "If it says zero, I have to believe it's more of a data reporting error or field the bank just didn't capture for some reason."
But it raises the question why would an application for a multi-million dollar loan be approved without the company identifying jobs would be retained? In order to apply, the borrower must certify the funds will be used to retain workers and maintain payroll.
"It's an absolute outrage," said Danielle Brian, executive director of the Project on Government Oversight. "The real incentive for many of these companies is these extremely low interest rate the government was providing. One percent loans. That's free money for them."
According to the SBA, even if these corporations don't qualify for a forgivable loan, the one percent interest rate will still be honored and there is no penalty.
It's important to point out, these one percent loans are available up to five years in many cases.
Curious which Bay Area companies got the money?
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