This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.nytimes.com/2020/05/18/business/ppp-deadline-return-funds-coronavirus.html
The article has changed 21 times. There is an RSS feed of changes available.
| Version 7 | Version 8 |
|---|---|
| ‘A Big Decision’: Firms Weigh Returning Federal Aid | ‘A Big Decision’: Firms Weigh Returning Federal Aid |
| (about 1 hour later) | |
| WASHINGTON — With one of its plants shut down because of the pandemic, Escalade, a sporting goods manufacturer in Evansville, Ind., was among the businesses that secured a federal stimulus loan in April. | WASHINGTON — With one of its plants shut down because of the pandemic, Escalade, a sporting goods manufacturer in Evansville, Ind., was among the businesses that secured a federal stimulus loan in April. |
| So did RealNetworks, a software developer in Seattle whose business selling software used by casinos and airports was now struggling. | So did RealNetworks, a software developer in Seattle whose business selling software used by casinos and airports was now struggling. |
| Both companies determined they needed the money to pay employees and steady their operations. But after the federal government scolded publicly traded companies for taking loans, the two firms took different paths in deciding whether to keep the funds. | Both companies determined they needed the money to pay employees and steady their operations. But after the federal government scolded publicly traded companies for taking loans, the two firms took different paths in deciding whether to keep the funds. |
| Escalade returned them, hoping to avoid running afoul of new federal guidelines for the loans and betting states would loosen stay-at-home restrictions enough to restart operations. RealNetworks kept its loan and says it will use it to bring workers back this week. | Escalade returned them, hoping to avoid running afoul of new federal guidelines for the loans and betting states would loosen stay-at-home restrictions enough to restart operations. RealNetworks kept its loan and says it will use it to bring workers back this week. |
| The revelation that big companies got loans intended to help small businesses struggling with the coronavirus has prompted outrage and concern that the government’s main program meant for mom-and-pop shops was being undermined. Lawmakers have opened congressional inquiries and demanded that firms give the money back, while the Trump administration has tightened eligibility rules for the program and Steven Mnuchin, the Treasury secretary, has threatened to hold firms criminally liable if they did not meet the program’s requirements. Mr. Mnuchin gave companies until Monday to decide whether to return their loans without repercussions. | The revelation that big companies got loans intended to help small businesses struggling with the coronavirus has prompted outrage and concern that the government’s main program meant for mom-and-pop shops was being undermined. Lawmakers have opened congressional inquiries and demanded that firms give the money back, while the Trump administration has tightened eligibility rules for the program and Steven Mnuchin, the Treasury secretary, has threatened to hold firms criminally liable if they did not meet the program’s requirements. Mr. Mnuchin gave companies until Monday to decide whether to return their loans without repercussions. |
| So far, at least 60 public and private companies had returned their small-business loans, according to data compiled by The New York Times. They ranged from the very large, like the owner of Ruth’s Chris steakhouses, to small firms like Escalade and the shoe start-up Allbirds. But the majority of money extended to public companies had not been returned. | So far, at least 60 public and private companies had returned their small-business loans, according to data compiled by The New York Times. They ranged from the very large, like the owner of Ruth’s Chris steakhouses, to small firms like Escalade and the shoe start-up Allbirds. But the majority of money extended to public companies had not been returned. |
| Representative James E. Clyburn of South Carolina led other Democrats on the Select Subcommittee on the Coronavirus Crisis in asking five large public companies this month to return their loans. One, MiMedx, announced the same day that it was returning its $10 million loan, saying the move had already been in the works. Two others, Quantum and EVO Transportation and Energy Services, indicated they would keep their loans. | Representative James E. Clyburn of South Carolina led other Democrats on the Select Subcommittee on the Coronavirus Crisis in asking five large public companies this month to return their loans. One, MiMedx, announced the same day that it was returning its $10 million loan, saying the move had already been in the works. Two others, Quantum and EVO Transportation and Energy Services, indicated they would keep their loans. |
| As companies wrestle with the decision about whether to return the money, many are torn between the help that the federal dollars would provide and the potential for being held criminally liable if it is determined they ran afoul of the rules. The potential for bad publicity is also complicating the decision. | As companies wrestle with the decision about whether to return the money, many are torn between the help that the federal dollars would provide and the potential for being held criminally liable if it is determined they ran afoul of the rules. The potential for bad publicity is also complicating the decision. |
| “I don’t take lightly the fact that we have 470 people that work for Escalade and those people have families,” said Scott Sincerbeaux, the company’s chief executive, who assumed his position about two weeks after the company was approved for its loan. | “I don’t take lightly the fact that we have 470 people that work for Escalade and those people have families,” said Scott Sincerbeaux, the company’s chief executive, who assumed his position about two weeks after the company was approved for its loan. |
| Escalade, which makes goods like archery bows and cornhole boards, has recently suffered from poor financial results and a falling stock price. Last year, its earnings per share fell almost 30 percent. In March, the chairman of its board called its results “unacceptable for any healthy business.” | Escalade, which makes goods like archery bows and cornhole boards, has recently suffered from poor financial results and a falling stock price. Last year, its earnings per share fell almost 30 percent. In March, the chairman of its board called its results “unacceptable for any healthy business.” |
| In a February filing, it said the coronavirus outbreak in Asia was affecting its supply chain. The firm said that “any significant disruption resulting from similar events on a large scale or over a prolonged period could cause significant delays” until it found new suppliers. | In a February filing, it said the coronavirus outbreak in Asia was affecting its supply chain. The firm said that “any significant disruption resulting from similar events on a large scale or over a prolonged period could cause significant delays” until it found new suppliers. |
| Then the virus came to the United States and brought “tremendous uncertainty” about Escalade’s business with it, Mr. Sincerbeaux said. A factory in Gainesville, Fla., had to shut down. Corporate employees in Indiana couldn’t go into the office. Workers in its warehouse were staying home. | Then the virus came to the United States and brought “tremendous uncertainty” about Escalade’s business with it, Mr. Sincerbeaux said. A factory in Gainesville, Fla., had to shut down. Corporate employees in Indiana couldn’t go into the office. Workers in its warehouse were staying home. |
| RealNetworks struggled, too, as the pandemic transformed American life. | RealNetworks struggled, too, as the pandemic transformed American life. |
| The company went public during the dot-com boom of the 1990s, only to see its stock fall in the subsequent bust. In recent years, it has marketed a facial recognition product to casinos and airports, among other venues. | The company went public during the dot-com boom of the 1990s, only to see its stock fall in the subsequent bust. In recent years, it has marketed a facial recognition product to casinos and airports, among other venues. |
| But its share price has fallen. At the end of February, it was hovering just above a dollar. Then the virus crippled travel and hospitality businesses. Companies that had been possible clients before the pandemic made it clear that they wouldn’t engage its services this year. | But its share price has fallen. At the end of February, it was hovering just above a dollar. Then the virus crippled travel and hospitality businesses. Companies that had been possible clients before the pandemic made it clear that they wouldn’t engage its services this year. |
| Rob Glaser, RealNetworks’ chief executive, said the pandemic had put a “bull's-eye” on the company’s facial recognition offering. He said it was “not as devastating to our company as if we were a cruise ship company or an airline or a restaurant chain, but we were directly affected.” | Rob Glaser, RealNetworks’ chief executive, said the pandemic had put a “bull's-eye” on the company’s facial recognition offering. He said it was “not as devastating to our company as if we were a cruise ship company or an airline or a restaurant chain, but we were directly affected.” |
| In response, RealNetworks laid off some workers and furloughed others. Escalade did not, although some of its warehouse workers stayed away for weeks under a stay-at-home order, according to Charles Furr, the president of their local union. | In response, RealNetworks laid off some workers and furloughed others. Escalade did not, although some of its warehouse workers stayed away for weeks under a stay-at-home order, according to Charles Furr, the president of their local union. |
| Both firms applied for loans backed by the federal government’s $660 billion Paycheck Protection Program. The loans can be forgiven — essentially becoming grants — if they are used primarily to meet payroll. The initial qualifications for the program required only that companies certify that the current economic uncertainty would affect their operations. | Both firms applied for loans backed by the federal government’s $660 billion Paycheck Protection Program. The loans can be forgiven — essentially becoming grants — if they are used primarily to meet payroll. The initial qualifications for the program required only that companies certify that the current economic uncertainty would affect their operations. |
| Escalade got $5.6 million on April 14. On April 24, RealNetworks qualified for $2.9 million. | Escalade got $5.6 million on April 14. On April 24, RealNetworks qualified for $2.9 million. |
| But the tide was already turning against the program. Owners of smaller businesses shut out of the program were outraged that a series of public companies, like Ruth’s Chris and the chain Kura Sushi, had gotten loans. Shake Shack, the burger chain, announced that it would return its $10 million loan voluntarily. | But the tide was already turning against the program. Owners of smaller businesses shut out of the program were outraged that a series of public companies, like Ruth’s Chris and the chain Kura Sushi, had gotten loans. Shake Shack, the burger chain, announced that it would return its $10 million loan voluntarily. |
| Updated June 5, 2020 | |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Then, on April 23, the Small Business Administration and the Treasury Department released guidelines urging public companies to return the money if they had access to funds elsewhere. Mr. Mnuchin said firms that took loans worth more than $2 million would be audited and could face criminal penalties if found to be in violation of the program’s guidelines. | Then, on April 23, the Small Business Administration and the Treasury Department released guidelines urging public companies to return the money if they had access to funds elsewhere. Mr. Mnuchin said firms that took loans worth more than $2 million would be audited and could face criminal penalties if found to be in violation of the program’s guidelines. |
| Mr. Glaser, RealNetworks’ chief executive and its founder, said the company had assessed the new guidelines and believed it was still complying with the rules by keeping the loan. The most recent round of capital raised by the firm came from Mr. Glaser himself. | Mr. Glaser, RealNetworks’ chief executive and its founder, said the company had assessed the new guidelines and believed it was still complying with the rules by keeping the loan. The most recent round of capital raised by the firm came from Mr. Glaser himself. |
| “There’s nothing we learned that caused us to say, ‘We misunderstood this the first time, or the rules changed between the first time and the second time that makes this look like a whole different enchilada than we thought it was,’” he said. | “There’s nothing we learned that caused us to say, ‘We misunderstood this the first time, or the rules changed between the first time and the second time that makes this look like a whole different enchilada than we thought it was,’” he said. |
| In Indiana, Mr. Sincerbeaux had to decide whether or not to return Escalade’s loan. | In Indiana, Mr. Sincerbeaux had to decide whether or not to return Escalade’s loan. |
| He spent his first morning as chief executive on April 27 learning about the company’s financial status, looking for signals that could guide him toward a decision. Some of Escalade’s products, like the archery gear, were faring poorly, but demand for basketball hoops and cornhole boards was surging. He also considered the new government guidance. | He spent his first morning as chief executive on April 27 learning about the company’s financial status, looking for signals that could guide him toward a decision. Some of Escalade’s products, like the archery gear, were faring poorly, but demand for basketball hoops and cornhole boards was surging. He also considered the new government guidance. |
| Mr. Sincerbeaux mulled over the factors his office alone, then with two other executives. The group called the company’s board of directors that afternoon to walk them through their recommendations to return the loan. The firm has not yet sought capital elsewhere or had to furlough any employees. | Mr. Sincerbeaux mulled over the factors his office alone, then with two other executives. The group called the company’s board of directors that afternoon to walk them through their recommendations to return the loan. The firm has not yet sought capital elsewhere or had to furlough any employees. |
| “It was probably not the typical C.E.O.’s first day on the job,” Mr. Sincerbeaux said. | “It was probably not the typical C.E.O.’s first day on the job,” Mr. Sincerbeaux said. |
| The chief executive said he had ultimately been driven by the new federal rules, coupled with a feeling that “we’re hitting a plateau in terms of the virus, or the curve, in some areas” that will cause states to let up on their restrictions. He also said he believed that the company’s products for family recreation would find demand as Americans remained largely at home. | The chief executive said he had ultimately been driven by the new federal rules, coupled with a feeling that “we’re hitting a plateau in terms of the virus, or the curve, in some areas” that will cause states to let up on their restrictions. He also said he believed that the company’s products for family recreation would find demand as Americans remained largely at home. |
| But even as he couched his decision in the hope that the nation will bounce back from its virus-induced lockdown, he said Escalade executives had considered a bleaker alternative future. | But even as he couched his decision in the hope that the nation will bounce back from its virus-induced lockdown, he said Escalade executives had considered a bleaker alternative future. |
| “Many places have hit a curve, but what if we’re not there?” he said. “What if we still have to endure stay-at-home orders? And if our Gainesville facility is shut down and we can’t manufacture product to meet demand?” | “Many places have hit a curve, but what if we’re not there?” he said. “What if we still have to endure stay-at-home orders? And if our Gainesville facility is shut down and we can’t manufacture product to meet demand?” |
| “And that was a big discussion in terms of thinking about the right thing to do for our employees, the right thing to do for our shareholders, the right thing to do for our stakeholders,” he said. “That’s a big decision.” | “And that was a big discussion in terms of thinking about the right thing to do for our employees, the right thing to do for our shareholders, the right thing to do for our stakeholders,” he said. “That’s a big decision.” |