According to official data released on Monday, the tens of millions of dollars U.S. lawmakers earmarked to assist small businesses during the Wuhan coronavirus-induced economic downturn, also went to investment banks who advise on corporate dealmaking.
Some part of the money for the Paycheck Protection Program (PPP) went to companies including Broadhaven Capital Partners LLC.
In order to avail the funding, companies had to certify in good faith that “current economic uncertainty makes this loan necessary to support” their ongoing operations. They need not pay back the loaned amount as long as the companies restore employment levels to pre-pandemic levels.
According to Broadhaven Capital Partners LLC’s website, it has advised on deals worth more than $50 billion (40 billion pounds) in the last 10 years, including the $4.5 billion sale of Legg Mason Inc, an asset manager, to Franklin Resources Inc, in 2020.
Broadhaven had applied for and was cleared for a PPP loan of between $350,000 and $1 million, according to a list released by the U.S. government. Other banks that applied for the PPP loan and received a loan in this range include Union Square Advisors LLC, a technology-focused investment bank, North Point Advisors Inc, a consumer and healthcare-focused investment bank and Sawaya Partners LLC, another consumer-focused investment bank.
The loans helped retain 35, 31 and 24 jobs at each firm, respectively, according to the data released by the U.S. Treasury Department and Small Business Administration.
Representatives for the banks did not respond to requests for comment.
Further, JMP Group LLC, an underwriter of high-profile initial public offerings (IPOs) including that of Uber Technologies Inc and Lyft Inc, was approved a PPP loan of between $2 million and $5 million, in order to retain 126 jobs.