The Los Angeles Lakers applied for and received $4.6 million from the Small Business Administration’s Paycheck Protection Program but returned the money “so that financial support would be directed to those most in need,” the Lakers said in a statement.
“The Lakers qualified for and received a loan under the Payroll Protection Program,” the statement from the team read. “However, once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need. The Lakers remain completely committed to supporting both our employees and our community.”
The Lakers are worth $4.4 billion and were No. 1 in operating income at $178 million, according to the latest ‘Forbes’ NBA team valuations.
The NBA also recently extended its line of credit to $1.2 billion for teams in need of cash.
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The SBA’s initial $349 billion program allowed business with less than 500 employees to borrow up $10 million over two years but the principal can be forgiven if the money is used to cover certain expenses, namely payroll, mortgage, rent and utilities.
Other companies such as Shake Shack, Ruth’s Hospitality, Potbelly and Sweetgreen said they planned to return money received from the program.
With the government getting ready to disperse an additional $300 million to small businesses as part of the Paycheck Protection Program, new guidance likely prohibits certain companies from applying.
“Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business,” the U.S. Department of the Treasury said in a FAQ. “For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.”
ESPN first reported the news.
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