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NBA's Lakers Return $4.5M Coronavirus Relief Loan Meant For Small Businesses To Keep Payroll

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NBA's Lakers Return $4.5M Coronavirus Relief Loan Meant For Small Businesses To Keep Payroll

National Basketball Association team Los Angeles Lakers on Monday said it returned a $4.5 million loan granted to it as part of the federal government's novel coronavirus (COVID-19) relief efforts.

What Happened

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

"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."

The Lakers has the second-highest valuation of NBA teams after New York Knicks at $4.4 billion, according to Forbes.

The NBA team employs less than 500 people, meeting the requirement of the U.S. Small Business Administration to receive aid from the coronavirus relief package.

Why It Matters

The Lakers was one of the high-profile companies, alongside AutoNation Inc. (NYSE: AN), Shake Shack Inc. (NYSE: SHAK), Kura Sushi USA Inc. (NASDAQ: KRUS), and Ruth's Hospitality Group Inc. (NASDAQ: RUTH), to have applied for and received the loan under the program that is aimed at helping struggling small businesses keep paying their employees during the pandemic.

As the companies faced criticism in the wake of the fund being depleted, a majority of them said they will return the loans.

Treasury Secretary Steven Mnuchin said last week that the loan was only meant for small businesses that can't otherwise raise the money through alternative means like the stock market.

Big companies getting loans under the program using loopholes in the law's language will face "severe consequences," Mnuchin warned, as reported by Business Insider.

 

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