SBA discloses PPP loan recipients; bank drive-throughs make a comeback

Receiving Wide Coverage ...

Where the money went

The Small Business Administration released information Monday on nearly 700,000 loans made through the $660 billion Paycheck Protection Program. The disclosures showed the program “helped a range of organizations including prominent restaurant chains, law firms and non-profits,” the Wall Street Journal said.

“Among the recipients the Trump administration disclosed Monday: Boies Schiller Flexner LLP, the law firm headed by antitrust litigator David Boies; Newsmax Media Inc., the media company run by Trump donor Christopher Ruddy; and P.F. Chang’s China Bistro Inc., a restaurant operator with more than 200 U.S. locations. Others on the list included the Girl Scouts, Illinois-based megachurch Willow Creek Community Church and the prominent New York synagogue Temple Emanu-El.”

“Restaurants, medical offices and car dealerships were the top recipients of large loans,” or those over $150,000, the New York Times reported. “The administration said that 86.5% of the loans were for less than that amount, so the nuanced snapshot represented only some of the companies that tapped funds. So far, banks have made about 4.9 million loans through the program, with an average size of $107,000.”

“A number of private-equity firms received millions of dollars” in PPP loans “despite being told they weren’t allowed to access the money,” the Journal said.

“About half the money went to employers in five industries,” the Washington Post said. “The health-care and social assistance industry received 12.9% of the money; 12.7% went to professional and technical services; 12.4% went to construction; 10.3% went to manufacturing; and 8.1% went to hotels, restaurants and other hospitality and food service employers.”

Arrested

German prosecutors arrested a Wirecard executive “who ran the unit at the heart of the company’s alleged fraud,” the Financial Times reports. “Oliver Bellenhaus, a 46-year-old sports car enthusiast, was arrested on suspicion of aggravated fraud. He will remain in police custody over fears that he is a flight risk and may tamper with evidence, prosecutors said in a statement on Monday.”

“He is the second senior Wirecard employee to be arrested after the former chief executive Markus Braun, who was later released on bail. The FT earlier reported that Mr. Bellenhaus, who ran Wirecard’s CardSystems Middle East, largely from his apartment in the world’s tallest building, had left Dubai and was staying at a five-star Munich hotel.”

The arrest warrant was based on “the urgent suspicion of conspiracy to commit fraud,” the WSJ said.

Wall Street Journal

We’re back

“The digital age threatened survival” of the bank drive-through window, “a popular customer convenience … long before ATMs and online banking. But Covid-19 has started to reverse their declining fortunes. Banks are reopening decommissioned and unused lanes. Some are installing new ones.”

But “the increased traffic has strained operations, prompting a wave of calls” to people who can service existing ones or get old ones operating again. “As more bank customers pull up to the drive-through, getting the lanes up and running has become a priority.”

Square rebounds

Square’s stock jumped another 5% on Monday to a near record close. It's up 15% over the past week and has more than tripled from its March 20 low. Before that its stock had dropped more than 55%, “as lockdowns led fewer people to visit small merchants that use Square’s popular credit-card reader for smartphones.”

Since then, however, “some Wall Street analysts have grown more bullish on Square, buying into the arguments of Jack Dorsey, its chief executive and chairman, that the company will disrupt the traditional banking and payments businesses. Square has benefited from burgeoning activity in other parts of its business, particularly its rapidly growing Cash App, a peer-to-peer payments tool that lets users send and spend funds and invest in stocks and bitcoin. The app’s direct-deposit volumes roughly tripled from March to April as many customers used the app to receive government stimulus payments, Square says.”

Financial Times

No Turkey shorts

Turkey banned six international banks from shorting stocks on its stock market, “the latest in a series of moves against foreign investors engaged in short selling. Borsa Istanbul said Barclays, Credit Suisse and Merrill Lynch (part of Bank of America) would be subject to a three-month ban on short sales of shares after failing to comply with a requirement to notify the authorities about such trades. The bourse added that Goldman Sachs, JPMorgan Chase and Wood & Co., the specialist emerging markets investment bank, would face a one-month restriction for the same reason.”

“The move risks compounding concerns among foreign investors that Turkey has adopted an increasingly hostile approach to overseas fund managers.”

Quotable

“There is still this segment of branch-centric customers who want to go to a teller. And the only one available is at the drive-through.” — Andrew Hovet, director at Novantas, about the renewed demand for bank drive-up teller windows.