US investment banks take funding intended for small businesses
Investment banks advising on corporate dealmaking received tens of millions of dollars from the $660 billion Paycheck Protection Program (PPP), which were earmarked to assist small businesses in the pandemic-induced economic crisis, according to government-released data.
Treasury Secretary Steven Mnuchin was under pressure from Congress to reveal where the Paycheck Protection Program loans have gone.
The objective of the loan is to help businesses restore employment to pre-pandemic levels.
The US Small Business Association will forgive loans if the beneficiaries meet all employee retention criteria, and the funds were used for eligible expenses.
PPP beneficiaries have to certify in good faith that the economic crisis makes the loan necessary to enable them to support their operations.
JMP Group LLC, an underwriter of high-profile IPOs, including those of Uber Technologies Inc and Lyft Inc, received a PPP loan between $2 million and $5 million that helped it retain 126 jobs.
JMP's shares surged in value by a third since March.
Broadhaven Capital Partners LLC, which advised on more than $50 billion worth of deals in the past decade, was cleared for a PPP loan of between $350,000 and $1 million.
Union Square Advisors LLC, North Point Advisors Inc, and Sawaya Partners LLC were each approved loans of between $350,000 and $1 million.
The loans helped the investment banks each 24 to 35 jobs.
Methuselah Advisors LLC availed a PPP loan for $169,160, enabling it to retain its staff after several projects were discontinued or suspended.
Among the beneficiaries was a fancy sushi restaurant at the Trump International Hotel in Washington, President Trump's longtime personal lawyer, high-priced law firms, and Washington lobbying shops.