FOX Business’ Charlie Gasparino says the Treasury is planning to audit companies that may have improperly accepted small business loans.
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AutoNation – America’s largest automotive retailer – received millions of dollars through the Paycheck Protection Program (PPP) via what appears to be a potential loophole in the program’s guidance.
The company received $77 million through the PPP by using separate tax identification numbers assigned to dozens of its dealership locations, as first reported by The Washington Post.
More than 80 locations are believed to have received funding.
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A spokesperson for AutoNation confirmed to FOX Business its board decided Thursday to cancel all PPP applications and return the funds by May 7.
AutoNation, a Fortune 500 company, had more than 26,000 associates over 300 locations throughout 18 states before the coronavirus outbreak. It has a market cap of around $3 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AN | AUTONATION | 33.63 | +2.69 | +8.69% |
PPP is designed to incentivize companies with fewer than 500 employees to keep staff despite difficult economic conditions that have resulted from the coronavirus pandemic. Applicants can receive up to $10 million, which can be forgiven in certain cases.
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However, a spokesperson for AutoNation noted the company was “clearly eligible” and intended to use the funding to rehire the 7,000 associates that had been furloughed as a result of the pandemic. All of the funds it had received were to be put toward payroll, the spokesperson said.
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This is the latest example of a larger company receiving funds while many mom-and-pop small business still haven’t had their applications processed.
Shake Shack and Ruth’s Chris have both said they will return their loans.
An initial $350 billion in funding for the program ran out last week. The Trump administration is adding another $310 billion for lenders to distribute as the program reopens on Monday morning.
