NPR: Why the high forgiveness rate of PPP loans is troubling to many people

[Mr. Sparkle]

The majority of Paycheck Protection Program loans given to small businesses during the COVID-19 pandemic have been forgiven, but new data show the program was rampant with fraud.

Interesting new data is out on the Paycheck Protection Program, or PPP for short. It gave potentially forgivable government loans to small businesses during COVID, and the data shows the vast majority of those loans have been forgiven. Sacha Pfeiffer of NPR's investigations team is here to explain why that high forgiveness rate is troubling to many people.

PFEIFFER: So there is no doubt that these loans were a lifesaver for many companies. And anyone who got PPP funding is probably relieved to hear that 92% of all the loans have been granted full or partial forgiveness so far. That's according to Small Business Administration data released this month. But a lot of that money went to businesses that didn't need it - wealthy celebrities like Khloe Kardashian and Tom Brady, for example. They have companies that each got a PPP loan of about $1,000,000 entirely forgiven. Also, many businesses that thrived during COVID got their loans forgiven, like some manufacturing and construction firms.

MARTÍNEZ: But was it legal for them to take that money?
PFEIFFER: Yes, it was. To qualify for a loan, you just had to say you thought you needed it and to get it forgiven, you did not have to prove the money was necessary. So that meant not only did people get loans they didn't truly need, it also attracted scam artists.

https://www.npr.org/2023/01/18/1149719608/why-the-high-forgiveness-rate-of-ppp-loans-is-troubling-to-many-people