Should rich execs be able to get PPP loans?

• Author: Foreman, Kelsie

News that wealthy executives took out PPP loans sparked outrage among the public. But that doesn't mean their employees didn't still need them.

When it was announced that Kanye West's clothing company Yeezy received a PPP loan in the midst of the pandemic, Reddit users took to the platform determined to crucify West. They felt he didn't deserve the loan. After all, why would West's company need government assistance when he is worth $1.3 billion and started construction on a new mansion this summer?

But Yeezy wasn't the only big brand to get a PPP loan. A few weeks later it was announced that other billionaires, including Don Hankey (Midway Car Rental), Alec Gores (Gores Vitac Holding), and Jim Justice's (governor of West Virginia and one of the state's wealthiest) all received PPP loans worth millions of dollars.

It was instances like this, coupled with other misconceptions and regulatory hiccups that only helped fuel the belief that PPP loans were a waste of tax dollars because they were further padding the pockets of the rich instead of those actually in need. In reality, these misconceptions couldn't be further from the truth.

PPP LOANS HAVE NOTHING TO DO WITH AN EXECUTIVE'S NET WORTH

Federal PPP loans have covered paychecks for as many as 51 million small business employees nationwide. On a local level, 93 percent of small business employees in Utah were supported by a PPP loan says David Carlebrach, VP of international investment for World Trade Center Utah.

Regardless of the internet's angst over the high profile loans, thousands of companies were helped in some way by PPP funding and these rich executives weren't wrong for applying for such funding. After all, there weren't many rules that determined which businesses deserved funding over others.

In fact, it was exceptionally easy to apply for a loan. To qualify, the business must: 1) support less than 500 employees (though, there are exceptions to this rule depending on industry and other factors), and 2) Have the principal location of business be inside of the US. By regulation standards none of the billionaires did anything wrong for applying to the program, they were just using the funding available to them.

"People thought that if you weren't severely impacted by the [economic downturn] that you weren't supposed to apply," says Carlebrach. "But there was no test."

According to regulations, even though West's net worth could keep Yeezy afloat for a few years in the event that...