Congress should forgive small PPP loans: Sen. Cramer
Sen. Kevin Cramer, R-N.D., calls for national energy policy that is consistent with national security and discusses legislation to streamline PPP loan forgiveness for small businesses.
Millions of dollars in taxpayer money flowed to Chinese companies through the $670 billion Paycheck Protection Program, a pivotal part of the U.S. government's massive response to the coronavirus pandemic.
Continue Reading Below
Congress at the end of March established the Paycheck Protection Program, a rescue fund designed to keep small businesses afloat during the virus-induced recession and avert millions of potential layoffs.
By and large, the program is open to any business with fewer than 500 employees per location, including American subsidiaries of foreign-owned companies. So long as 60 percent of the money goes toward maintaining payroll, the federal government will forgive it, essentially turning the loan into a grant.
TRUMP ADMIN RELEASES NAMES OF ALMOST 700,000 PPP BORROWERS
Some $521 billion in taxpayer-funded aid went to more than 5.1 million small businesses, propping up roughly 51 million jobs in the midst of the virus-induced crisis.
That includes more than 125 companies that Chinese entities own or invest in, which received between $192 million to $419 million in government-backed aid, according to a study published by strategy consulting firm Horizon Advisory. The analysis was based on a review of publicly available Small Business Administration data, which was released in June.
At least 32 Chinese companies received loans worth more than $1 million, with those totaling at least $85 million and up to $180 million. (The SBA did not reveal precise dollar amounts of the loans and instead provided a range for each loan).
PPP REOPENS TO APPLICANTS WITH $132 BILLION REMAINING
“The extent and nature of PRC-owned, -invested and -connected entities among the PPP loan recipients indicate that without appropriate policy guardrails, U.S. tax dollars intended for relief, recovery and growth of the U.S. economy — and small businesses in particular — risk supporting foreign competitors, namely China,” the authors of the report, Emily de La Bruyère and Nathan Picarsic, wrote, referring to the People’s Republic of China. "In the process, they may support an agenda that runs contrary to U.S. economic and security interests."
Loans went to companies across different sectors, including defense and aerospace, advanced manufacturing, electric cars, pharmaceuticals and information technology, according to the report. At least eight companies affiliated with the People's Liberation Army, the Chinese military, received loans.
COMPANIES RETURNED $30B IN VIRUS RELIEF LOANS FROM PPP
Some of the companies highlighted in the report include Continental Aerospace Technologies, part of a state-owned defense conglomerate that received a loan of up to $10 million, and HNA Group North America LLC and HNA Training Center New York — both subsidiaries of China's HNA Group — which received loans of up to $1 million. HNA Group, a Fortune Global 500, specializes in real estate, aviation and financial services transactions.
BGI Americas Corporation, a subsidiary of a global gene-testing giant, received a loan of up to $1 million; however, the company said it would return the loan after Axios reported on it.
While the money that went toward these companies likely help to save American jobs, the firms "conceivably could access sources of capital from public or private markets to save their U.S. operations. Their PPP participation saved U.S. jobs, but likely at the expense of other U.S. small businesses," the report said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Source: Read Full Article