SBA Administrator Jovita Carranza of the Paycheck Protection Program, separating facts and myths.
The French Laundry, the upscale California restaurant where Governor Gavin Newsom was dining with friends and lobbyists a month ago, received more than $ 2.4 million in taxpayer-funded loans through the Paycheck Protection Program, according to government filings.
The Bay Area Michelin star restaurant received two loans, both approved April 30, according to the latest data from the Small Business Administration (SBA). A loan of more than $ 2.24 million was used to keep 163 employees on the payroll. The second, at $ 194,657, was used to retain five employees.
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The restaurant did not respond to a request for comment from FOX Business.
Congress created the $ 670 billion rescue fund with the passing of the March CARE Act to ease the economic pain of the coronavirus pandemic and help small businesses avoid mass layoffs. The federal government will forgive the loans if at least 60% of the money is spent on maintaining payroll.
The French Laundry – which was opened in 1994 by celebrity chef Thomas Keller with the help of 60 investors – offers an exclusive al fresco dining experience from $ 450 per person, and offers white truffle and caviar dinner for $ 1,200 per person, according to online reservation services.
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The restaurant was also the site of a recent controversy after photos surfaced of Newsom, the Democratic governor of California attending a birthday party and sitting at a 12-person round table in a dining room enclosed and covered on three sides. Newsom, who has maintained that the event took place outdoors, nevertheless received flak for seemingly violating his own strict rules for shutting down the coronavirus.
According to ABC7 News, which first reported the story, the money the French Laundry received was 17 times more than what the average Bay Area restaurant received, leading to a backlash from other business owners.
“I’m angry, but what can I do about it?” Dennis Berkowitz, the former owner of Vault 164 restaurant in San Mateo, told ABC7. Berkowitz said he was struggling to get a $ 318,000 loan that was used to keep about 50 employees. But the loan wasn’t enough to keep his business going, and he was forced to sell the restaurant in July, he said.
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At first, the program was heavily criticized for lending support to listed companies that had other options for relief – even as small businesses languished. The SBA and the Treasury Department, which jointly managed the program, sought to close the loopholes that would allow millions of companies to tap into the fund, including a commitment to audit every loan worth more than $ 2 million.
Over the course of about four months, the PPP has paid out about $ 525 billion in forgone loans to 5.2 million companies, saving an estimated 50 million jobs, the SBA said. The program was closed to new applicants in late July, although there is about $ 38 billion left in the fund.
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Lawmakers have been trying to negotiate a new round of emergency aid for months, to no avail. But Congress leaders on Wednesday appeared to be getting close to a $ 900 billion emergency relief deal that would include additional funding for the PPP, as well as increased unemployment benefits and funding for vaccine distribution, education, and health care.
“We have made great strides in pushing out a targeted aid package,” Senate Leader Mitch McConnell, R-Ky., Said Wednesday.