(Reuters) – Tens of millions of dollars earmarked by U.S. lawmakers to help small businesses in the coronavirus-induced economic downturn have been paid out to investment banks that advised them on dealings with the companies, data shows official released on Monday.
Under the Paycheck Protection Program (PPP), businesses had to certify in good faith that “the current economic uncertainty makes this loan necessary to support” their ongoing operations. The government-backed loan is forgivable as long as businesses restore employment to pre-pandemic levels.
Broadhaven Capital Partners LLC, which, according to its website, has advised on more than $50 billion in deals over the past decade, including this year’s $4.5 billion sale of the asset manager. Legg Mason Inc’s assets to rival Franklin Resources Inc, applied for and was approved for a PPP loan of between $350,000 and $1 million, according to a list released Monday by the US government.
Broadhaven representatives did not respond to a request for comment on why the investment bank requested the loan and whether it received and used it.
Technology-focused investment bank Union Square Advisors LLC, consumer and healthcare-focused investment bank North Point Advisors Inc and consumer-focused investment bank Sawaya Partners LLC were also approved for a loan of between $350,000 and $1 million.
The loans helped retain 35, 31 and 24 jobs at each company, respectively, according to data released by the US Treasury Department and the Small Business Administration.
Representatives for the banks did not respond to requests for comment.
A spokesperson for media and industrial-focused investments, Methuselah Advisors LLC, said it received a $169,160 PPP loan. He said he needed it to avoid laying off staff after several of his projects were halted or put on hold.
JMP Group LLC, an underwriter of high-profile initial public offerings including those of start-ups Uber Technologies Inc and Lyft Inc, was approved for a PPP loan of between $2 million and $5 million, helping to retain 126 jobs, according to the data.
A spokesman for JMP, whose shares have risen by a third since March, did not immediately respond to a request for comment.
Reporting by Joshua Franklin in Pompano Beach, Florida; Editing by Greg Roumeliotis and Peter Cooney