Public companies with big salaries cashing in on small business loans in Ohio
CLEVELAND, Ohio (WOIO) - 19 News has uncovered local public companies with hefty salaries cashing in on low interest loans intended to keep small business operating during the COVID-19 crisis.
At the same time, some small businesses are still waiting for their money and worried about the future.
In November 2019, Kristen Parken built a new eco studio for her Raw Esthetics studio in Lakewood.
It’s a green spa focused on health and wellness. Business was growing until COVID-19 forced the doors to close.
Managing the closure has been stressful. Parken says she applied for two loans: the Economic Injury Disaster Loan and the Paycheck Protection Program.
That was March 31, and she is still waiting for relief.
“It’s been a waiting game,” said Parken.
While she waits, loan money thru the Paycheck Protection Program came quickly for some publicly traded companies in Northeast Ohio. And some of those businesses were paying their top leaders big salaries.
According to documents filed with the Security and Exchange Commission, SIFCO Industries, Inc. entered into a promissory note on April 10 for $5,024,732 under the Paycheck Protection Program. According to other documents, in 2019, the company’s CEO earned a compensation package worth $786,579.
Avalon Holdings Corporation, which provides waste management services to industrial, commercial, municipal and governmental customer--and owns a golf and country club--applied for two loans under the Paycheck Protection Program.
The first loan was for $800,000 and the second loan was $2,000,000. Records also show the same company paid the CEO of its waste management services a compensation package worth $516,090.
Biotech company Athersys, Inc. asked for $1.3 million, citing the pandemic had not had a significant adverse effect on its business, however it was possible.
In 2019, the same company paid its founder and CEO a compensation package worth $1,596,653. When contacted by 19 News, Athersys, Inc. says it has since returned the money.
Avalon Holdings and SIFCO Industries declined to comment for our story.
When first established, all three companies qualified for the loans. However, once the program ran out of money leaving thousands of small businesses with no lifeline, the Department of Treasury issued new guidance for the program and requested publicly traded companies to either repay the loans or certify “in good faith” that they need the loans to continue to operate.
Kristen Parken is frustrated about the loan process and finds it sad it didn’t help more small businesses like her spa, but she is planning for the future and excited to reopen and help her customers find a little bit of solace during these difficult times.
Sen. Sherrod Brown released the following statement to 19 News:
“We passed PPP to get small businesses help and certainty. The Administration is failing them – they botched this. They failed to get people answers quickly, and they failed to make sure money wasn’t going to huge businesses. Thousands of Ohio small businesses have gotten help – but not nearly enough. I’ve demanded the Administration reduce wait times, hire more staff, get this money out the door more quickly. I will continue to hold the Trump Administration accountable and stand up for Ohioans.”
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