RICHMOND, Va. (WRIC) – The public is getting its first look at where billions in taxpayer dollars went after the Small Business Administration released detailed data on a program that officials say saved nearly one million jobs in Virginia during pandemic closures.
Created under the CARES Act, the Paycheck Protection Program was designed to keep mom-and-pop shops afloat. It allowed businesses to keep employees on their payroll and have their loan forgiven in full if they met certain spending requirements.
The data shows that about 85 percent of the 100,000 plus individual loans distributed so far in Virginia were less than $150,000 apiece. Specific business names for these loans were not made public due to concerns that it would put personal information, like salary size, at risk.
A review of SBA data found that several franchise operators of national chains received top dollar loans to the tune of $5-$10 million.
Among them is Burgerbusters, Inc., which claims to be the 5th largest Taco Bell franchise operation in the U.S. with 151 locations across five states. The privately held company is headquartered in Virginia Beach and employs more than 4,200 people, according to its website.
Potomac Family Dining Group Operating Company, LLC also received a loan of up to $10 million. The group’s website says it runs the 6th largest franchise in the Applebee’s system with nearly 70 restaurants under its belt.
Welburn Management Consulting Co, Inc. claims to operate 30 McDonald’s in the DMV area with more than 1,500 employees. They too got a loan, as did franchise operators for TGI Fridays, Chili’s Grill & Bar and Domino’s Pizza.
Five Guys Enterprises, LLC was also on the list of loans in the maximum range. The application appeared to come from the restaurant chain’s corporate headquarters in Lorton, Virginia.
These companies didn’t immediately returned WFXR’s requests for comment.
SBA Regional Administrator Steve Bulger couldn’t speak to individual loan applications but he said some large franchises would qualify for the PPP under a caveat cleared by Congress.
The PPP program was widely promoted as an option for small businesses with up to 500 employees. Bulger said, in some cases, a single business entity that employs not more than 500 employees per physical location would be eligible, even if their total employee count exceeds that.
“There are a lot of companies out there that are classified as small businesses, even if you don’t think that they are,” Bulger said. “If they fit the definition and the rules of the program then that’s great.”
Shake Shack and Ruth’s Chris made headlines after returning their PPP loans. The chains came under pressure to do so as several smaller businesses had trouble accessing the funds in the early months of the program.
Big name restaurants haven’t been the only ones stirring controversy in the context of this program.
As was first reported by the Associated Press, several businesses owned by elected officials also received PPP loans. Gov. Ralph Northam’s former medical practice, Children’s Specialty Group, received a payment between $2-$5 million.
Northam was not immediately available for an interview but his spokesperson said that he had nothing to do with the application. Northam isn’t currently involved in the day-to-day operations of the practice but he does still own a stake, the spokesperson added.
“I can tell you there was no political favors here. The bottom line is any business that was eligible got the loan,” Bulger said.
Children’s Specialty Group reported using the funds to retain about 250 jobs.
According to the database, more than 36,000 businesses that received loans in Virginia didn’t report retaining any jobs from the PPP. Some wrote zero in that column while others didn’t write anything at all.
Under a more flexible version of the program, businesses are supposed to spend at least 60 percent of the loan on maintaining payroll to have it forgiven, according to Bulger. He said that businesses will have to provide documentation to prove it.
“There were some inaccuracies in the data. Not everybody filled it out exactly correct in all columns but the lenders were responsible for verifying that data before they requested the loan,” Bulger said.
To get money out as quickly as possible, Bulger said Congress allowed business owners to ‘self certify’ that they met the program requirements with the understanding that there could be some fraud. He said all loans $2 million or more will be audited.
“If there was any wrong-doing by anyone, that will come out and it will be dealt with in the future by the appropriate authorities but we’re very satisfied that the program itself really got to the mom-and-pops and the small businesses that everybody really wanted it to get to,” Bulger said.
Congress recently announced the extension of the application period for the PPP. Businesses now have until Aug. 8 to claim their share of the $130 billion pot, according to Bulger.