After drawing ire from smaller businesses and some lawmakers, the network of hotels run by prominent Texas Republican donor Monty Bennett will be returning the $76 million it received in coronavirus …
After drawing ire from smaller businesses and some lawmakers, the network of hotels run by prominent Texas Republican donor Monty Bennett will be returning the $76 million it received in coronavirus disaster funds.
In a statement released Saturday, the Dallas-based hotel network said it would give up all the funds it had received from the government’s Paycheck Protection Program. Three related companies — Ashford Inc., The Ashford Hospitality Trust and Braemer Hotels & Resorts — had emerged as the largest recipients of loans from the federal aid package meant to help small businesses stay afloat during the pandemic.
The group of companies indicated it was giving back the money because of changes imposed by the Small Business Administration. It had applied for $126 million from the program.
“While we believed then and continue to believe today that we qualify for PPP loans based on the legislation and rule-making in place at the time our applications were submitted, continuous SBA rule changes and evolving opinions by Administration officials have led us to conclude that we may no longer qualify,” the company’s statement read.
The program was part of the multitrillion-dollar relief package that Congress passed to mitigate the economic free fall that resulted from the temporary closure of businesses and stay-at-home orders to prevent the spread of COVID-19, the disease caused by the new coronavirus.
The aim of the PPP fund was to essentially float small businesses for several months and help those companies avoid laying off employees or closing up shop altogether. If an employer follows a set of government rules, the loans — which come from taxpayer money — will effectively be forgiven.
In order to avoid creating a new federal bureaucracy, President Donald Trump’s administration designated banks as the central clearinghouse for the money. The problem for many small-business owners is that not all applicants were equal in the eyes of their banks. Multiple small-business owners told The Texas Tribune over the last month that banks prioritized submitting loans for prized clients over the smaller players. Many potential applicants were not even able to pull their paperwork together before the money ran out.
The Trump administration scrambled to revise eligibility criteria for the program after large and publicly-traded companies were able to wade into the fund because of what many described as vague guidelines and a hurried roll out of the program.
“Ashford management had no intention of crowding out any business from gaining equal access to the PPP funds, and could not have known that congressional appropriations for the program would be insufficient to cover the needs of all other businesses in the nation that have suffered similar harm,” the company said in its statement.
Disclosure: The Texas Tribune, as a nonprofit local newsroom and a small business, applied for and received a loan through the Paycheck Protection Program in the amount of $800,000.
"Dallas-based hotel group to return $76 million in disaster loans meant for small businesses" was first published at https://www.texastribune.org/2020/05/02/monty-bennett-hotel-loans/ by The Texas Tribune. The Texas Tribune is proud to celebrate 10 years of exceptional journalism for an exceptional state.
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