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Investment banks got aid intended for US small businesses
[FLORIDA] Tens of millions of dollars earmarked by US lawmakers to assist small businesses in the coronavirus-induced economic downturn went to investment banks advising on corporate dealmaking, according to official data released on Monday.
As part of the Paycheck Protection Programme (PPP), companies had to certify in good faith that "current economic uncertainty makes this loan necessary to support" their ongoing operations. The government-backed loan is forgivable as long as the companies restore employment to pre-pandemic levels.
Broadhaven Capital Partners, which according to its website has advised on more than US$50 billion worth of deals in the past decade, including the US$4.5 billion sale this year of asset manager Legg Mason Inc to rival Franklin Resources Inc, applied for and was cleared for a PPP loan of between US$350,000 and US$1 million, according to a list released by the US government on Monday.
Broadhaven representatives did not respond to a request for comment on why the investment bank applied for the loan and whether it had received and used it.
Technology-focused investment bank Union Square Advisors, consumer and healthcare-focused investment bank North Point Advisors Inc and consumer-focused investment bank Sawaya Partners LLC were also each approved for a loan of between US$350,000 and US$1 million.
The loans helped retain 35, 31 and 24 jobs at each firm, respectively, according to the data released by the US Treasury Department and Small Business Administration.
Representatives for the banks did not respond to requests for comment.
A spokesman for media and industrials-focused investment Methuselah Advisors said it received a PPP loan for US$169,160. He said it needed it to avoid letting staff go after several of its projects were discontinued or suspended.
JMP Group, an underwriter of high-profile initial public offerings including those of ride-hailing start-ups Uber Technologies Inc and Lyft Inc, was approved for a PPP loan of between US$2 million and US$5 million, helping retain 126 jobs, according to the data.
A spokesman for JMP, whose shares have increased in value by a third since March, did not immediately respond to a request for comment.