Some US companies will keep small business loans, defying backlash

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[NEW YORK] Several publicly listed companies worth hundreds of millions of dollars said on Friday they had no plans to return funding they received under a US government program providing emergency loans to small businesses, even though some of their peers have started to do so. Read more at The Business Times.

MiMedx Group Inc, a manufacturer of biomaterials with a market value of US$420 million, Digimarc Corp, a digital watermark provider with a market value of US$197 million, and ZAGG Inc, a maker of screen protectors for mobile devices with a market value of just shy of US$100 million, told Reuters on Friday they took the loans because they needed them and planned to keep them.

MiMedx, which took a US$10 million loan, said it was in compliance with the Treasury's loans and could not access the capital markets because it was not current in its financial statements. "Covid-19 has created operating complexities many never imagined. From sourcing material, to guarding our staff's health and maintaining high quality production standards," MiMedx said in a statement.

Digimarc, which took a US$5 million loan, said it complied with both the guidelines and the spirit of the program."We don't know whether the capital markets are open to us until we go there," CEO Bruce Davis said."With extensive retail closures nationwide, our business has been severely impacted during the shutdown of all non-essential businesses due to Covid-19. We are using the money in accordance with government guidelines," Zagg said in a statement.

There is more loan money coming. President Donald Trump signed a new US$484 billion aid bill on Friday, the fourth passed by lawmakers to address the coronavirus crisis to fund small businesses and hospitals. It includes US$310 billion for PPP loans.

 

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