Just 12% of publicly traded Paycheck Protection Program borrowers elected either to decline or return loan funds after approval, while 25% of public companies approved for loans of $5-10 million did the same, according to an analysis by the law firm Bryan Cave Leighton Paisner released today.
“It appears that notwithstanding the fearmongering of [PPP FAQs], the negative media attention and related political scrutiny, over 75% of PPP borrowers approved for a PPP loan in excess of $5 million decided to retain their PPP loan, apparently trusting their earlier determination that they had a good faith belief that they needed to apply for the PPP loan in light of COVID-19,” wrote BCLP partner Rob Klingler.
The analysis—based on a review of Securities and Exchange Commission filings—showed that about 200 public companies with PPP loans of over $2 million kept their loan funds. The Small Business Administration in May extended a safe harbor to PPP loans for under $2 million, deeming them to have made the certification as to the loan necessity in good faith. Drawing further on SBA data, the BCLP analysis estimated that about 1,400 PPP loans approved for $5-10 million were subsequently returned or not closed, with about three-quarters of these loans being canceled quickly.