LA Lakers Return Millions To Small Business Aid Fund

LOS ANGELES, CA — The Los Angeles Lakers reportedly returned about $4.6 million in federal aid through the Small Business Administration's Paycheck Protection Program, it was reported Monday.

The club is among numerous large organizations or corporations caught with their hand in the till. Controversy has been swirling around the Paycheck Protection Program, which quickly ran out of funding, leaving most small businesses without aid to survive the coronavirus pandemic. To avoid backlash, several large companies have returned the funds, so that small businesses can access the aid.

LA’s team, which was estimated to be worth more than $4 billion before the virus outbreak, is among the most profitable of NBA franchises, ESPN reported Monday. The club was included in the first round of recipients of the $349 billion aid package. According to ESPN, the Lakers are among several highly capitalized entities that were given aid over thousands of smaller businesses were shut out.

"The Lakers qualified for and received a loan under the Payroll Protection Program," the Lakers said in a statement to ESPN. "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."

According to ESPN, the Lakers have access to favorable loans. NBA teams can use the league's credit facility program.

SEE ALSO: Banks Accused Of Rigging Aid Program Against Small Businesses

Other major companies to give back funding have included the restaurant Shake Shack, which has remained open for takeout orders throughout the pandemic. Last week several class action lawsuits were filed in Los Angeles against the nation’s four largest banks, which processed the applications.

The lawsuits allege JPMorgan, Bank of America, Wells Fargo and US Bank allowed bigger companies to drain the Paycheck Protection Program while passing over smaller companies seeking emergency loans.

Bank officials deny the allegations.

The lawsuits capped weeks of frustration over the disbursement of $349 billion Congress allocated in emergency funds to help American businesses survive the COVID-19 pandemic under the CARES Act. The PPP program which launched on April 3 was intended to provide loans up to two and a half times the total of a business owner's monthly payroll but quickly ran out of funds, leaving most of the small business applicants empty-handed, according to the plaintiffs. According to the lawsuits, the banks shuffled the large loans to the front of the line because they proved to be more profitable for the banks.

More than 25% of the aid went to less than 2% of the firms that got relief including several publicly traded companies with thousands of employees employees and hundreds of millions of dollars in annual sales, Reuters reported.