Nearly 300 companies that got up to $500 million in US government stimulus aid have filed for bankruptcy. They employed 23,000 people, a WSJ analysis found.
- Nearly 300
companiesthat received up to half a billion dollars in coronavirus-related governmentloans have filed for bankruptcy, according to an analysis by the Wall Street Journal.
- The coronavirus pandemic and lack of any additional funding were the main reasons for the businesses going bust, the Journal said.
- Loans awarded to businesses that went bust amounted to between $228 million and $509 million, the analysis found.
- The companies that filed for bankruptcy employed a total of 23,400 people
Nearly 300 companies that received up to $500 million in coronavirus-related government loans have filed for bankruptcy, an analysis has found.
An analysis of government data and court filings by the Wall Street Journal revealed that 285 American firms that obtained Paycheck Protection Program (PPP) loans in April eventually ran out of
The government awarded between $228 million and $509 million to these businesses that filed for bankruptcy, the Journal reported. The government only publishes ranges of loan costs, rather than a single figure.
The companies, which employed 23,400 workers altogether, collectively came from nearly every US state, the Journal said.
The US government has given a total of $525 billion in
Many of these American companies say the PPP funds weren't enough to keep them afloat, as the impact of the coronavirus pandemic strained their businesses, per the Journal.
The overall number of firms that failed despite getting government funding is likely to be much higher: The Journal said it only looked at big borrowers, which accounted for roughly half of all the loans, but only around 13.5% of the total participants.
Many small businesses go into liquidation when they run out of money instead of filing for bankruptcy, the Journal added.
Companies in the hospitality sector that received PPP loans were the worst affected, the analysis found. Hotels and restaurants that filed for bankruptcy had almost 6,600 employees in total, the most of any industry in the analysis.
The number of Americans receiving unemployment benefits was 709,000 for the week that ended November 7, the Labor Department said November 12.
This was a decrease from the previous week, where jobless claims stood at 751,000.
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