When the government said it would give thousands of dollars to help
lending Grants under the Wage Protection Program were signed by all eligible enterprises, which represented the majority of small and medium enterprises (which did not have access to capital markets) with up to 500 employees. And why not: it was free money from the government, which launched helicopter money and sought to squeeze the newly created money into the economy. There were no flaws – grants would be forgiven if they were used to pay wages or rents, and – at least according to widespread assumptions – loans would be kept secret. That’s why it was so amazing when it turned out that some “asset managers,” such as the Ritholtz Asset Management, led by Josh Brown and Barry Ritolz, also accepted bailout grants stay in business. Looking back, Ritolz is the author of “The Salvation Nation,” so probably this should not have come as a surprise.
which should the surprise was that the asset manager, that is, a professional who collects generous fees for predicting the future and endowed with billions of capital, not only could not do this, but he himself needed help. It just shows how important it is to choose very calm and patient clients.
Of course, we cannot blame them: like most other recipients, Ritolts probably expected that his name would never be released, although technically he used taxpayer money to support his company. And since this is taxpayer money, everyone has the right to know how to use it.
Only in the case of a little more than half a trillion dollars of PPP grants, which was not because for almost 3 months after the launch of the PPP program, Finance Minister Stephen Mnuchin insisted on keeping the names of all recipients secret, to a large extent the anger of those who finance effectively is growing. loans.
Everything changed late on Friday when Bloomberg announced that The Trump administration said it would provide detailed information about companies that received loans of $ 150,000 or more from the coronavirus assistance program for small businesses, after a negative reaction to his earlier refusal to publish data on which firms received billions of dollars in state aid. Eleven news organizations sued to disclose details of PPP loan recipients.
Which is bad news for all of these “financial advisers,” such as Ritolz, who will soon receive rewards for “predicting” the future, but it will not even make sense to plan a budget for a short-term crisis, not to mention the presence of hedging for a reduction scenario. As for the rest, it is unclear how ready the majority of small enterprises would be if they knew that the very act of seeking help would open them up for possible public shame.
Company names, addresses, demographic data and other information will be disclosed in five ranges, starting from $ 150,000-350,000 and up to $ 5-10 million. The United States, said in a joint statement by the Treasury and Small Business Administration.
According to agencies, for loans less than $ 150,000, only totals aggregated by zip code, by industry, type of business, and various demographic categories will be released. According to them, loans worth more than $ 150,000 make up almost 75% of the total approved dollars. It was not clear when the data would be published.
According to the latest SBA data, loans were approved for almost 4.7 million small businesses totaling $ 514.5 billion, As of June 12, there were 3.9 million. Loans worth less than $ 150,000 in the total amount of $ 136.7 billion. US and nearly 650,000 larger loans worth 375.6 billion. Dollars. USA.
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Lawmakers demanded disclosure of loan details for the Salary Protection Program after Treasury Secretary Stephen Mnuchin said on June 10 at a Senate committee hearing that the names of companies that received forgiven loans and the amounts were proprietary or confidential. Despite the fact that, as Bloomberg notes, the administration had previously stated that the details would be disclosed, and the PPP application said that such data would be “automatically” published.
Officials expressed concern about the disclosure because the payroll of the company is used to determine the amount of the loan, and some independent contractors and small businesses use their home addresses to be disclosed.
“I am glad that we managed to reach a bipartisan agreement on disclosure, which will ensure the proper balance of public transparency in protecting information on the wages and personal incomes of small enterprises, individual entrepreneurs and independent contractors,” Mnuchin said in a statement.
Critics argue that the public has a right to know how taxpayer dollars were used, and more details are needed to find out if PPP services enterprises that need help.
“The administration’s decision to hide the basic data on a PPP loan is an alarming sign that it does not care about who receives this funding, how much it receives and why,” said House Speaker Nancy Pelosi in a June 12 statement. “The administration should immediately reverse this decision and fulfill its obligation to make this information public.”
Republican Senator Marco Rubio of Florida, chairman of the committee on small business and entrepreneurship, said the public deserves to know how effective PPPs are, but there are legitimate concerns about disclosing information about small firms. “Today’s announcement strikes a balance between these issues and the need for transparency,” Rubio said.
Lawmakers also called on the Treasury and SBA to provide detailed information about their coronavirus assistance loans to the government accountability department, which is preparing a report on how aid funds have been spent.