Here’s what you need to know:
- The Treasury reveals more about who got small-business loans.
- Here are some of the companies and organizations that received funding.
- Technology stocks rallied, leading Wall Street higher.
- Young pilots lured with promises of job security are now at risk of losing their jobs.
- A future without cash is getting closer.
The Treasury reveals more about who got small-business loans.
Restaurants, medical offices and car dealerships were the top recipients of large loans from the federal government’s $660 billion small business relief program, according to data released Monday by the Trump administration.
The data, which the Trump administration released under pressure from lawmakers and watchdog groups, offered the most detailed look yet at the sectors and businesses that took advantage of a program aimed at keeping workers on the payroll amid virus-induced shutdowns.
Yet the information released on Monday was confined to companies that received loans of more than $150,000 through the Paycheck Protection Program, while the administration said that 86.5 percent of the loans were for less than that amount.
Here are some key takeaways:
-
More than 40,000 full- or limited-service restaurants received loans worth as much as $32 billion.
-
Physicians offices received loans worth as much as $19 billion. Total loans were as much as $17 billion for car dealers, $13 billion for law offices and $5 billion for dentists. Plumbers, religious organizations and schools also headlined the list.
-
Dozens of tenants at buildings owned by President Trump or managed by his companies received loans — raising the likelihood that Mr. Trump may have indirectly benefited from the government support.
-
Of the $521 billion allocated through the Paycheck Protection Program, about $68.2 billion — roughly 13 percent — went to companies in California. Another $41.1 billion flowed to Texas businesses.
-
Nearly 5,000 businesses received individual loans between $5 million and $10 million, according to the data. The administration included ranges for the loan amounts, not specific figures.
-
The data showed that more than 3,000 companies said they would be retaining 500 employees, exactly the program limit.
-
The administration said that the money allocated through the program so far had helped support more than 50 million jobs. The share of overall small business payroll supported per state ranged from 72 percent in Virginia to 96 percent in Florida. — Luke Broadwater, Jeanna Smialek, Jim Tankersley and Ben Protess
Here are some of the companies and organizations that received funding.
Sprinkled among the beneficiaries of the Paycheck Protection Program were businesses that are likely to attract scrutiny, including a fancy sushi restaurant at the Trump International Hotel in Washington; Kanye West’s company, Yeezy; and President Trump’s longtime personal lawyer.
Washington lobbying shops, high-priced law firms and special-interest groups also received big loans, according to the administration, the latest indication of how of the government’s centerpiece effort to shore up mom-and-pop shops set off a race by organizations far afield from Main Street to secure federal money.
Here are some of the businesses the Treasury Department said received loans.
-
Kasowitz Benson Torres, the law firm founded and run by President Trump’s longtime personal lawyer, Marc E. Kasowitz, received a loan of between $5 million and $10 million. The firm represented Mr. Trump for more than a decade before he was elected president, in his business dealings and in other matters, such as helping Mr. Trump keep divorce records sealed. Mr. Kasowitz and the firm also represented Mr. Trump during Robert S. Mueller III’s investigation into Russian interference in the 2016 presidential election.
-
As concert venues around the country went dark to prevent the spread of the virus, touring companies for notable musicians appear to have applied for the loans to stay afloat. Lil’ Jon Touring, for example, received a loan of between $150,000 and $350,000. Tamar Juda, Lil Jon’s publicist, said that the loan had allowed the artist to keep his core touring staff employed.
-
At least four e-sport video game companies received loans of between $150,000 and $2 million, with the largest going to Envy Gaming, which received between $1 million and $2 million, according to the data. The Dallas-based Envy is one of the biggest players in the world of e-sports and fields competitive teams in games like “Fortnite” and “Overwatch.”
-
A firm that raises money for President Trump’s re-election campaign and the Republican National Committee received a loan of more than $1 million, while a firm that produces Mr. Trump’s political advertisements received between $350,000 and $1 million. So too did a consulting firm started by President Barack Obama’s former campaign manager Jim Messina one that was paid by Hillary Clinton’s 2008 campaign for communications consulting. Companies that make most of their money from lobbying or political activity are supposed to be barred from receiving federal coronavirus recovery loans. Many of the biggest and most influential lobbying and political consulting firms likely were able to qualify by highlighting lines of business that fell outside the restrictions.
-
Many Washington think tanks and advocacy groups accepted the loans, including some who typically oppose government spending. The conservative Citizens Against Government Waste accepted a loan of between $350,000 and $1 million, as did Citizens United, which fought to enable corporations to spend unlimited funds on elections. The anti-immigration Center for Immigration Students received a loan of between $350,000 and $1 million, as did the Council for Christian Colleges and Universities.
-
The money spanned the political spectrum with conservative, liberal and moderate groups using the money to help stave off the economic hit from the pandemic. Both the Israel on Campus Coalition and the CAIR Foundation, which works to promote a positive image of Islam and American Muslims, received between $350,000 and $1 million. Media Matters for America, the left-learning organization that seeks to combat “conservative misinformation,” received a loan of between $1 million and $2 million.
-
Groups connected to Congress also received loans. Both the Congressional Black Caucus Foundation and the Congressional Hispanic Caucus Institute received loans of between $350,000 and $1 million.
-
The program benefited several members of Congress. Representative Mike Kelly, Republican of Pennsylvania, owns Mike Kelly Automotive Group, Mike Kelly Automotive L.P. and Mike Kelly Hyundai, all of which accepted loans between $150,000 and $350,000. A spokesman for Mr. Kelly said that the congressman had properly followed the rules of the disaster aid program and that the money would be used “to sustain the income of workers who would otherwise have been without pay or employment at no fault of their own during the coronavirus pandemic.” Businesses associated with other members of Congress or their relatives, both Democrats and Republicans, received similar disaster aid.
-
Some loan recipients are connected to the president’s son-in-law and senior adviser, Jared Kushner. The data show that a loan of between $350,000 and $1 million was made to Esplanade Livingston, a Kushner family entity that owns the land in Livingston, N.J., where the family’s Westminster Hotel is. In 2018, Mr. Kushner divested his stake in the entity, from which he once derived income generated by that hotel. “Several of our hotels have applied for federal loans, in accordance with all guidelines, with a vast majority of funds going to furloughed employees,” said Pete Febo, Kushner Companies’ chief operating officer.
— Luke Broadwater, Jeanna Smialek, Jim Tankersley, David McCabe, Ben Protess and Kellen Browning.
Technology stocks rallied, leading Wall Street higher.
Wall Street’s gains continued for a fifth straight day on Monday, with technology stocks leading the rally as investors continued to brush off signs of a resurgent coronavirus amid hopes for more government spending to bolster the economy.
The S&P 500 rose more than 1.5 percent, while the technology-heavy Nasdaq composite climbed more than 2 percent as companies like Amazon, Apple, Netflix and Twitter rallied.
After a turbulent stretch in June, stocks have steadily recouped nearly all of their losses from that period with a rally that has lifted the S&P 500 by more than 5 percent in a week.
That run has defied a growing number of coronavirus cases around the United States and new measures to contain the virus that include shutting down some businesses again, partly because of new data that showed the economy was regaining its footing.
Last week figures showed that employers added nearly five million workers back to payrolls in June, home purchases rose sharply and consumer confidence jumped. On Monday, the Institute for Supply Management said activity in the U.S. services sector rebounded last month.
Investors also expect lawmakers in Washington to authorize more government spending to offset further economic damage. Though the specifics of any spending plan — and the timeline for it — are far from certain, the White House on Monday suggested it would back more spending.
“I think the president has been very clear that he’s supportive of another stimulus check,” Mark Meadows, the White House chief of staff, said to reporters on Monday. Mr. Meadows said a plan could come together later in July, but noted that “everybody looks at this as the ‘last train leaving the station,’ so they want to attach some of those special interest needs to that,” suggesting that much was left to be negotiated.
Still, with economists warning that the recovery could be slower than markets currently expect, the rally is susceptible to a sudden change in sentiment if indicators shift. One trigger for that shift could be the upcoming earnings reporting season, when many companies will address the financial impact of the coronavirus for the first time in months.
Wall Street’s gains on Monday came after a rally in global stocks, with shares in China surging after a front-page editorial in the state-run China Securities Journal urged investors to take advantage of “bullish market expectations” coming out of the pandemic. — Mohammed Hadi
Young pilots lured with promises of job security are now at risk of losing their jobs.
For years, flight schools, airlines and experts encouraged people to become pilots. They promised young recruits a job that was lucrative and secure because thousands of pilots in their late 50s and early 60s would retire in the coming years and demand for travel would continue growing.
The profession is still stacked with older aviators, but the pilots most at risk as airlines make deep cuts in the coming months are those who are just starting out.
To prepare for an uncertain future, the nation’s largest airlines are stockpiling billions of dollars in cash. If ticket sales do not recover soon, American Airlines, Delta Air Lines, Southwest Airlines and United Airlines have said they could resort to job cuts as soon as Oct. 1, the first day when airlines are free to eliminate jobs and reduce hours under a stimulus law that Congress approved in March.
Airlines could lay off, furlough or reduce the hours of tens of thousands of pilots, cuts that would disproportionately fall on those who have less union seniority and training. Major airlines have already stopped hiring pilots after posting hundreds of openings in the first quarter of the year, according to Future & Active Pilot Advisors, a consulting firm.
Several companies are offering buyout packages to avoid deeper cuts later. Southwest has acknowledged in discussions with its pilots union that the airline is most likely overstaffed by more than a thousand pilots. The company is offering several years of partial pay and benefits to those who agree to leave the company temporarily or permanently. Delta warned last week that it could furlough nearly 2,600 pilots and is offering early-retirement packages.
Some pilots said the turmoil was nerve-racking, but those who have been in the profession for a while have come to expect it.
“You kind of know going in that aviation has high highs and low lows,” said Lisa Archibald, 41, a Delta pilot who entered the industry days before the 2001 terrorist attacks. “You do it because you love what you do.” — Niraj Chokshi
A future without cash is getting closer.
On a typical Sunday, when patrons at Julien Cornu’s cheese shop in Paris load up on Camembert and chèvre for the week, about half would pay by digging into their pockets for euro notes and coins.
But in the era of the coronavirus, nearly everyone at La Fromagerie chooses to pay with plastic.
“They don’t want to have to touch anything,” Mr. Cornu said. While cash is still accepted, even older shoppers — his toughest clientele when it comes to adopting digital habits — are voluntarily making the switch.
The coronavirus is accelerating a shift toward a cashless future, raising new calculations for merchants and enriching the digital payments industry. It is a golden moment for credit card companies, banks and digital platforms, which are capitalizing on the crisis to encourage consumers and retailers to use cards and smartphone apps that yield lucrative fees.
Payment and processing companies such as PayPal (whose stock is up about 55 percent this year) and Adyen, based in the Netherlands (up 72 percent), also stand to gain. So do data analytics and fraud prevention companies, and businesses that enable merchants to accept card payments. — Liz Alderman
Uber buys Postmates for $2.65 billion as food delivery companies consolidate.
Uber has agreed to acquire the food delivery start-up Postmates for $2.65 billion, as the ride-hailing firm aims to grow its presence in on-demand food delivery while its core business struggles.
The companies announced the all-stock deal on Monday morning. Uber will combine Postmates with its own food delivery subsidiary, Uber Eats, which has been growing during the coronavirus pandemic.
Food delivery apps, which connect drivers, restaurants and customers, have grown quickly in recent years, fueled by venture capital and armies of contract workers. But the services they offer are not very different from one another, leading to heavy competition and pressure to keep fees low. More people have been using delivery services during the pandemic, but profits have been elusive.
As a result, delivery app companies have circled one another, aiming to make deals to gain scale. Postmates previously discussed possible deals with DoorDash, the largest service in the United States, and another rival, Grubhub, according to two people with knowledge of the talks.
In recent months, Uber also discussed buying Grubhub. But last month, Grubhub was instead sold to Just Eat Takeaway, a European delivery company, for $7.3 billion.— Mike Isaac and Erin Griffith
Warren Buffett makes his first post-pandemic purchase.
Berkshire Hathaway bought Dominion Energy’s gas pipeline network on Sunday in a $9.7 billion deal, including debt.
The acquisition is Warren Buffett’s biggest in four years, putting to use some of Berkshire’s $137 billion cash pile. There has been some investor anxiety lately about Mr. Buffett’s recent drought of deal-making. Buying the Dominion assets would more than double Berkshire’s market share of natural gas movement in the U.S., to 18 percent.
On the same day as the deal was announced, however, Dominion and its partners canceled plans to build the Atlantic Coast Pipeline.
In reversing course, the companies said that the six-year-old project faced more legal battles and costly delays that would not make it worthwhile. The shifting politics of fossil fuels, which may fall more out of favor if Democrats make gains in November elections, as polls currently suggest, could be another factor. In announcing the deal with Berkshire, Dominion emphasized a “narrowing” focus on becoming a more “sustainability focused” utility, reducing its reliance on fossil fuels. — Michael J. de la Merced
With department stores disappearing, malls could be next.
Malls were already in trouble before the pandemic as shopping had moved increasingly online. But a string of bankruptcy filings by major retailers like Neiman Marcus and J.C. Penney in recent months could hasten their decline.
As many as 25 percent of the nation’s nearly 1,200 malls could shut down amid the fallout from the coronavirus, said Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology.
Department stores account for about 30 percent of the mall square footage in the United States, with 10 percent of that coming from Sears (which filed for bankruptcy in 2018) and J.C. Penney, according to Green Street Advisors, a real estate research firm.
Many small mall retailers have clauses in their leases — so-called co-tenancy clauses — that allow them to pay reduced rent or even break the lease if two or more anchor stores leave a location. . — Sapna Maheshwari
Business - Latest - Google News
July 07, 2020 at 04:30AM
https://ift.tt/2Z4nVnF
Treasury Says Small-Business Loans Supported Over 50 Million Jobs: Live Updates - The New York Times
Business - Latest - Google News
https://ift.tt/2Rx7A4Y
Bagikan Berita Ini
0 Response to "Treasury Says Small-Business Loans Supported Over 50 Million Jobs: Live Updates - The New York Times"
Post a Comment