SAN MARCOS – Federal data released last Monday reveals that more than 1,500 San Marcos businesses received federal Paycheck Protection Program (PPP) loans designed to help small businesses financially impacted by the COVID-19 shutdowns.
The data shows that more than 300 businesses in San Marcos received large loans of $150,000 or more. The largest recipient being an “employment services” firm called Hospitality Team Members, Inc., which received a loan of $5-$10 million.
Not much information can be found about Hospitality Team Members, Inc. except that it is headed by Jon Fredricks, the president & CEO of Welk Resort Group, a more than $150 million company with several resort locations nationwide.
The company’s listed address is also the same address as Welk’s corporate office.
If connected, Welk Resort Group would be one of several major hotel companies in the county that was awarded between $5-$10 million through a loophole that has allowed large hotels and restaurants to apply for loans regardless of how many workers they have, as long as each location employs fewer than 500 people.
It’s one of the reasons the program came under fire back in April after burning through funds and providing loans to several larger chains, leaving countless small businesses without any sort of relief.
Welk Resort Group could not be reached for comment.
The PPP was initially created by the Small Business Administration (SBA) as part of the $2 trillion CARES Act that was signed into law back in March. Since then, it has allocated $669 billion to American businesses in the form of loans.
According to the SBA, it was meant to provide a direct incentive for small businesses to keep their workers on the payroll. About 650,000 businesses received the money.
“The loan may be partially or fully forgiven if the business keeps its employee counts and employee wages stable,” the SBA says.
The federal government hasn’t released any data about recipients until now. The new information includes the names and addresses of businesses receiving loans of more than $150,000.
Specific dollar amounts were not reported, but loans were grouped into five categories. The lowest range is $150,000 to $350,000, the highest is $5 million to $10 million.
Loans of less than $150,000 were reported without the names or addresses of recipients.
Tomme Arthur, co-founder and COO of Port Brewing/The Lost Abbey in San Marcos, told The Coast News that they received a PPP loan of somewhere between $250,000 and $500,000, which helped them retain almost all of their employees.
“We had furloughed about 25 to 30 employees at that point, and that money allowed us to bring those people back in good confidence, knowing that we had the ability to pay them. We are very grateful for that,” Arthur said.
Arthur added that they applied for the loan back in April and received it through Bank of America about two weeks later. Because they were able to put at least 60% of it toward payroll for their employees, their loan will be forgiven, according to SBA rules.