The Los Angeles Lakers received and then returned a forgivable loan of roughly $4.6 million under a federal program designed to help small businesses during the coronavirus pandemic.
The team confirmed in a statement provided to local media that it “qualified for and received a loan under the Paycheck Protection Program.”
“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 team said in a statement.
The money has been returned, but many are now wondering how the team qualified for a small business loan in the first place. The Lakers are, after all, valued at $4.4 billion, second to only the New York Knicks as the most valuable NBA team.
Businesses with 500 or fewer employees are eligible for the program. Since the Lakers have a staff of about 300 workers, they were technically able to apply, according to CNN. However, the U.S. Treasury Department issued new guidelines that require borrowers to “certify in good faith that their PPP loan request is necessary.”
The Lakers were reportedly the only NBA team to ask for a Paycheck Protection Program loan from the Small Business Administration.
Confirmed that the Los Angeles Lakers were the only NBA team to ask for a Paycheck Protection Plan loan from the Small Business Administration. They received $4.6M and, as first reported by @kevinarnovitz, they have now returned it.
— Darren Rovell (@darrenrovell) April 27, 2020
The program was included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed on March 27 and signed into law by President Donald Trump. A total of $349 billion was set aside for the program, which is intended to help small businesses keep their workers on payroll during the coronavirus pandemic.
The program blew threw its first round of funds in a little more than two weeks and was replenished with another $250 billion on Friday. The Lakers apparently applied for a loan during the first round of funding, but returned it after they learned that the program was out of money.
Treasury Secretary Steve Mnuchin told CNBC Tuesday that he “never expected in a million years” that the Los Angeles Lakers would apply for a loan.
“I’m a big fan of the team, but I’m not a big fan of the fact that they took a $4.6 million loan,” he said. “I think that’s outrageous and I’m glad they returned it.”
Mnuchin said that the Small Business Administration will now being doing a “full review” of any loan worth more than $2 million “before there is loan forgiveness.”
U.S. Sen. Sherrod Brown (D-OH) called for an investigation Monday into reports that some Paycheck Protection Program lenders are prioritizing “larger and wealthier clients.”
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Anthony Gockowski is managing editor of The Minnesota Sun and The Ohio Star. Follow Anthony on Twitter. Email tips to [email protected].
Photo “Staples Center” by Prayitno. CC BY 2.0.