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Federal pandemic business loans saved 3.3 million Florida jobs

Data released by the federal government this week — after lawsuits from multiple media organizations — included the names of all loan recipients and provided an updated look at a program that was extended until August.
Two Florida foster care agencies will receive more than $1 million in Payroll Protection Program funds.
Two Florida foster care agencies will receive more than $1 million in Payroll Protection Program funds. [ Small Business Administration ]
Published Dec. 3, 2020

The Paycheck Protection Program meant to keep workers employed at small businesses during the first months of the coronavirus pandemic saved 3.3 million jobs in Florida, according to new data on borrowers and loan amounts released by the Small Business Administration.

The program, developed in part by Senate Small Business Committee chairman and Florida Republican Sen. Marco Rubio, was part of a massive $2 trillion relief bill that became law in March. The Paycheck Protection Program was designed as a forgivable government loan to small businesses affected by the pandemic, essentially allowing businesses who employ 500 employees or fewer to have payroll and business expenses covered by the federal government for a period of time. (The Tampa Bay Times and its related companies received an $8.5 million loan.)

The Small Business Administration released data in July that showed the program saved 3.2 million jobs in Florida. But the data released over the summer only included the names of loan recipients who got more than $150,000. The data released by the federal government on Tuesday — after lawsuits from multiple media organizations — included the names of all loan recipients and provided an updated look at a program that was extended until August.

The total spent on the Paycheck Protection Program in Florida was $31.93 billion.

Rubio said in a statement that he supports working with Democrats on the Small Business Committee to pass another round of Paycheck Protection Program funds. The program proved to be relatively popular with Democrats and Republicans during its first iteration, though additional money has been held up for months as both parties negotiate a comprehensive relief bill.

“It’s clear that the (Paycheck Protection Program) has been the most successful piece of the bipartisan CARES Act, and it’s great news that so many Florida small businesses were able to take advantage of this historic lifeline to prevent from closing and to keep their employees paid,” Rubio said in a statement to the Miami Herald.

Rubio added that Congress should pass more Paycheck Protection Program funding before 2021.

“It should have happened this summer. It needed to happen this fall. Enough is enough. Let’s get this done.”

The rapid application and approval process made the loans an easy vehicle for fraud, something Rubio said was a necessary evil to make Paycheck Protection Program funds available in a matter of weeks. In Florida, publicly traded companies like Pollo Tropical’s Texas-based parent Fiesta Group applied for loans but later returned them. One Miami-based businessman who received $3.9 million in Paycheck Protection Program loans despite monthly revenues and expenses at his moving business totaling about $200,000 was arrested after purchasing a $300,000 Lamborghini Huracan Evo with taxpayer money.

“For months, I’ve been calling on the (Small Business Administration) to be as transparent as possible about how American taxpayer money is being spent within the (Paycheck Protection Program), including releasing a list of all ... recipients,” Florida Republican Sen. Rick Scott said in a statement. “I’m glad this information is finally out. We know there was widespread fraud and abuse throughout the program, and tens of thousands of companies received (Paycheck Protection Program) loans when they shouldn’t have. Now, as Congress considers additional relief for individuals and small businesses, we have to make sure ANY extension of the ... program includes common sense reforms.”

Scott wants any future Paycheck Protection Program recipients to prove that they’ve been negatively affected by the pandemic before being approved for a loan, a common practice for Small Business Administration loans after major disasters but one that often takes months to process.

“We need to fix this and make sure loans only go to businesses that have shown a substantial reduction in revenue due to the coronavirus,” Scott said.

Companies that received $10 million, the largest Paycheck Protection Program loan available, include Deerfield Beach-based gym company Youfit, national law firm Boies Schiller Flexner LLP, Fort Lauderdale-based fiber optic telecommunications company Hotwire Communications, Fort Lauderdale-based regional airline Silver Airways and Miami-based law firm Cole, Scott & Kissane.

The Small Business Administration data also shows that Aventura-based restaurant chain Benihana received a $10 million loan, though a representative for the company said Wednesday it did not end up accepting the $10 million funds it had been approved for from Connecticut-based Webster Bank. Florida Department of Economic Opportunity records show the company terminated 501 Florida-based employees in April.

Richard Cole, managing partner of Miami-based law firm Cole, Scott & Kissane, PA, which according to the Small Business Administration’s filing received $10 million from City National Bank, said he would not comment on the firm’s finances.

A representative for Fort Lauderdale-based Silver Airways, which according to the Small Business Administration’s filing received $10 million from City National Bank, did not respond to a request for comment. The airline has filed nine Worker Adjustment and Retraining Notification layoff or furlough letters with the Florida Department of Economic Opportunity affecting 325 workers.

A representative for Internet provider Hotwire Communications, which according to the Small Business Administration’s filing received $10 million from City National Bank, said the company had no comment.

In May, the Miami Herald confirmed Flanigan’s Seafood Bar and Grill chain had received a total of $13.1 million in Paycheck Protection Program funds from Bank of America. In an interview, CEO Jimmy Flanigan said that money was “heaven sent.”

“There is no doubt that without (the Paycheck Protection Program) there would have been a tremendous amount of layoffs at Flanigan’s,” he said.

In total, 423,134 loans were granted to Florida-based entities. Sole proprietors and independent contractors affected by the pandemic were also eligible to apply for Paycheck Protection Program loans, though the program is currently closed as Congress and the White House decided not to pass an additional round of coronavirus relief during the fall.

On Tuesday, a bipartisan group of lawmakers unveiled a $908 billion coronavirus relief package in an attempt to break a months-long stalemate between House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell. That package, which was endorsed by Pelosi as a starting point for negotiations on Wednesday, includes $288 billion for another round of Paycheck Protection Program funding.

Scott said he was opposed to the bipartisan proposal because of the money that will be sent to state governments.

“I’m very disappointed that a proposal from some of my colleagues today apparently includes provisions that spends hundreds of billions of dollars in taxpayer money to bail out wasteful states when we don’t even know how much is still unspent from the previous coronavirus response packages that Congress passed earlier this year,” Scott said in a statement.

Rubio said the bipartisan proposal “barely provides enough to fund a second round of Paycheck Protection Program loans” but said he was encouraged that some Democrats are willing to negotiate.

McConnell countered with a $500 billion plan of his own on Tuesday that includes $257 billion for another round of Paycheck Protection Program funds. The White House has backed the scaled-down McConnell plan, but Democrats are not expected to endorse it.