Hurting long before Pandemic, failing companies took stimulus money then closed anyway

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Stein Mart Inc. was in desperate financial shape long before COVID-19 forced closures at its discount department stores. During the past several years, the retailer had hemorrhaged tens of millions of dollars. Like many struggling businesses, the company in June 2020 turned to the federal government’s Paycheck Protection Program, or PPP, as a possible savior. The $10-million loan didn’t last long.

Within two months, Stein Mart filed for Chapter 11 bankruptcy protection, citing more than $500 million in liabilities. The company closed all 280 stores and 9,000 workers lost their jobs. And, the company will never repay American taxpayers the $10-million.

Nothing prevented Stein Mart from taking the PPP handout on its way under.

Lenders participating in the Small Business Administration relief program shelled out more than $520 billion last year to millions of companies searching for a lifeline to stave off the economic impacts of COVID-19. Like Stein Mart, USA TODAY found that some were failing long before the pandemic hit.

Josh Salman from USA Today explains how failing companies were able to take stimulus money and close anyway. USA Today

To read more, go to: https://www.usatoday.com/story/news/investigations/2021/01/13/recipients-stimulus-funds-went-bankrupt-fired-workers-and-closed/3960382001/

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