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Tuesday, December 7, 2021

How many paychecks did PPP loans protect?

Credit: WCPO Cincinnati
Duration: 03:37s 1 shares 2 views

How many paychecks did PPP loans protect?
How many paychecks did PPP loans protect?

The WCPO I-Team discovered at least 15 companies that secured PPP loans also announced local layoffs in Ohio, Kentucky and Indiana.

GREATER CINCINNATI EMPLOYERSGOT NEARLY FIVE áBILLIONDOLLARS IN SMALL-BUSINESSRELIEF LOANS THROUGH THEPAYCHECK PROTECTIONPROGRAM.BUT DAN MONK AND THEWCPO 9 I-TEAM HAS LEARNED THATP-P-P BORROWERS HAVE ANNOUNCEDMORE THAN 18 HUNDRED LOCALLAYOFFS SINCE APRIL---BOTHBEFORE AND áAFTER THEY GOTLOAN MONEY.ááááITEAMBONGááááIT WILL TAKE MORE SECRET SAUCETO REPLACE WHAT THE PANDEMICTOOK FROM JEFF THOMASCATERING."And I think it was smart ofour government to keep mycompany in business."OWNERJEFF THOMAS BORROWED $198,000THROUGH THE PAYCHECKPROTECTIONPROGRAM."If I didn't have it right nowafter this many months, I'd behanging on by my toenails."BUTTHOMAS ALSO LAID OFF 90EMPLOYEES---INCLUDINGHIMSELF---BEFORE HE TOOK OUTTHE LOAN."I've been paying thegovernment for 35 years andI've never even been onunemploymentuntil this.

I hadto go ounemployment forthree months.

It was thestrangest feeling in my life,when you've been anentrepreneur that long, justto pay my ownbills."THE I-TEAM HAS BEENSCRUTINIZING FEDERAL STIMULUSSPENDING FOR WEEKS NOW.

ITTURNS OUT IT'S NOT ALL THATUNCOMMON FOR PAYCHECKPROTECTION BORROWERS TO CUTALSOJOBS.NATIONALLY, THE RESEARCH FIRMS&P GLOBAL MARKET INTELLIGENCEHAS NOW TIED MORE THAN 15,000LAYOFFS AND FURLOUGHS TO PPPBORROWERS.TO BETTER UNDERSTAND THERELATIONSHIP BETWEEN LOCALLAYOFFS AND THESE LOANS, THEI-TEAM REVIEWED BUSINESSESTHAT FILED LAYOFF NOTICES INOHIO, KENTUCKY, AND INDIANAOVER THE PAST FOUR MONTHS.

WEFOUND 15 COMPANIES THATFEDERAL P-P-P RECORDS SHOWALSO BORROWED BETWEEN 32 AND69 MILLION DOLLARS COMBINED.YET, TOGETHER THEY ALSOANNOUNCED MORE THAN 1,800LOCAL LAYOFFS OR FURLOUGHSBEFORE OR AFTER GETTING THELOAN.

IN THOMAS'S CASE--HEDIDN'T FILE A FORMAL NOTICEABOUT HIS PRE-LOAN LAYOFFSWITH THE DEPARTMENT OF LABORNOR DID HE HAVE TO BECAUSE HEEMPLOYS LESS THAN 100 PEOPLE.ACCORDING TO THE GOVERNMENT,IT DOES NOT VIOLATE THEPAYCHECK PROTECTION PROGRAM TOTAKE OUT THE LOAN AND ALSO LAYOFF EMPLOYEES."The original thought when theprogram was put together was,we're going to shut down theeconomy for two to four weeksand this loan was designed tokeep your employees for thattwo to four weeks.

But thattwo to four weeks has turnedinto four or five months."NORTHERN KENTUCKY UNIVERSITYECONOMIST JANET HARRAH SAYSPAYCHECK PROTECTION PROBABLYKEPT AT LEAST 25% OF GREATERCINCINNATI'S WORK FORCE INTACT."We know it's messy.

We knowit's not been perfect.

Butoverall it's done what it wassupposed to do and that wassave people's jobs."THOMASSAYS HE DIDN'T WANT A PAYCHECKPROTECTION LOAN IN APRILBECAUSE THE RULES CALLED FORCOMPANIES TO SPEND 75 PERCENTOF THE PROCEEDS ON WAGESWITHIN EIGHTWEEKS."I didn't have a product tosell."BUT THE RULES CHANGED INJUNE TO GIVE COMPANIES 24WEEKS TO SPEND THEIR LOANPROCEEDS - AND THE ECONOMYIMPROVED.

SO THOMAS TOOK THEPLUNGE.

HE RECALLED 11FULL-TIME EMPLOYEES AND ABOUT40 PART-TIMERS SINCETHEN."It scared me a lot, more sofor the employees than formyselfSTEVE WADDELL ISGENERAL MANAGER AT JEFF THOMASCATERING."Some of these people thatlive paycheck to paycheck andhave hardships outside of workthat they already have tocontend with, and then to havethis fall on top of it.

Youknow I was really concernedfor them."HIS EMPLOYEES AREGRATEFUL THOMAS TOOK THEACTIONS HEDID."Staying on unemployment witha family and three children isnot something that I wanted todo.

I needed to have afull-timeposition.""I like to be busy all thetime, feel like I'mcontinually progressing inlife.

So, for me I actuallystruggled with mental health alot during this quarantine andthe shut down so I was justhappy to be back at work."DANMONK WCPO 9 I-TEAM.ááááIT

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