Long-time data storage vendor Quantum infused $10 million into its fund after qualifying for the US Paycheck Protection Program (PPP), said Blocks and Files. This comes despite claims that it is not eligible for the loan, which was intended for small firms and sole proprietorship.
The amount, which is $10 million, is the maximum loan allowed by the program. The PPP allows a total of $349 billion in “forgivable loans to small businesses to pay their employees during the COVID-19 crisis.”
According to the PPP information sheet, the program was created to assist all businesses with 500 or fewer employees. It also makes exceptions for organizations with more than 500 employees given that they satisfy the US Small Business Administration standards.
However, the fact sheet clarifies that the SBA affiliation requirements are “waived” for small businesses in the hotel and food services sector, franchises listed in the SBA’s Franchise Directory, and those that obtained financial assistance from small business investment companies with SBA licenses.
Moreover, the PPP is only available for companies with payroll costs of not more than $100,000 per employee annually.
Moreover, the article also remarked that forgivable loan means that the amount can be waived given that the business uses the additional fund to pay for payroll costs, the majority of its mortgage interest, rent and utility expenses.
The loan will be written off only off the aforementioned expenses are covered within 8 weeks after getting the loan and after maintaining employee and compensation levels within that period.
Quantum Receives Criticism
Blocks and Files noted that Quantum may not qualify for the loan because it filed $402.7 million in revenues during the fiscal year of 2019. The report noted that this “is not exactly small.” The article also cited the firm’s 2019 annual report, which said that it has around 800 employees across the globe as of March 31, 2019.
To clarify this matter, a spokesperson from Quantum said that it qualifies for the PPP because it satisfies SBA requirements. According to SBA, size standards for businesses under the Computer Storage Device Manufacturing Industry specifies the number of employees to be 1,250.
The spokesperson noted that Quantum is eligible for the PPP loan as it has fewer than 1,250 employees, with 550 in the US and 800 globally.
The additional fund is “saving jobs” at the company, added the representative.