Los Angeles Lakers return $4.6 million federal loan
The team says they never intended to keep smaller businesses from participating in the loan program
The Los Angeles Lakers returned a $4.6 million loan from the government that was intended for small businesses struggling due to COVID-19.
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ESPN reported that the NBA franchise, valued at $4 billion applied for the federal grant that was designed to help smaller companies who have been financially hurt by the novel coronavirus.
The team applied through the Small Business Administration’s Paycheck Protection Program and were among the first to receive funds through the first round of distributions. Despite the $349 billion allotted to the PPP it quickly ran out of money and many small businesses complained that they were shut out of the process.
On Monday, the Lakers announced that they were returning the money. According to sources, they were the only team to apply for the PPP program after the NBA was suspended in March due to the coronavirus.
“The Lakers qualified for and received a loan under the Payroll Protection Program,” the Lakers said in a statement to ESPN. “Once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need. The Lakers remain completely committed to supporting both our employees and our community.”
Treasury Secretary Steven Mnuchin blasted the decision of the sports team as “outrageous” for taking the loan in the first place.
“I’m not a big fan of the fact that they took a $4.6 million,” Mnuchin told CNBC’s Squawk Box. “I think that’s outrageous.”
He added that, he “would have never expected in a million years that the Los Angeles Lakers” to make such a move and was glad the money was returned.
The Lakers are not the only big brand to face backlash over their decision to apply for the PPP money. Ruth’s Hospitality Group, the parent company of the Ruth’s Chris steakhouses took a $20 million loan, Shake Shack $10 million and Auto Nation took a $77 million loan in the past week. All the companies have since returned the funds.
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Mnuchin declared that it was “unfortunate” that these bigger companies took advantage of loopholes but ultimately he was “encouraged by the number of people that have paid them back.”
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