The Los Angeles Lakers recently got caught up in a kerfuffle. Just as the coronavirus pandemic hit broke out, the NBA shut down all its operations. Even though this was a welcome move in terms of health and safety of the players and the staff, it caused another problem. Wages.

The American Government has a program to help small businesses get money so that at the end of this pandemic, everyone at least has enough to survive. Unfortunately, the Lakers’ recent involvement with the program caused some chaos.

How the Los Angeles Lakers received a ‘small business’ loan

The USA Government has based the Paycheck Protection Program on a simple concept. The program will help keep small businesses afloat during the economic disaster caused due to the worldwide quarantine.

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Small businesses were to to use the money for necessary transactions, ranging from payroll to mortgage interest and rent.

Reportedly, the Los Angeles Lakers received a loan from this program. The team applied for and received a $4.6 million loan via the Paycheck Protection Program. This comes as a surprise because, according to Forbes, the Lakers’ value is $4.4 billion.

By the looks of it, the news took even Treasury Secretary Steven Mnuchin by surprise. He told CNBC,

“I never expected in a million years that the Los Angeles Lakers, which, I’m a big fan of the team, but I’m not a big fan of the fact that they took a $4.6 million loan.”

The Lakers repent

A Lakers spokesperson’s statement emailed a response to CNN Business. According to the email, the team paid the amount back as soon as possible, as they realized that there were others who needed the money more. The statement read,

 “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.”

As a response, the treasury secretary said, “I think that’s (the Lakers took a loan) outrageous and I’m glad they returned it or they would have had liability.”

The most bizarre part of this situation is how the Lakers, the second most valuable team in the NBA, received the loan. Apparently, the team maintains a full-and part-time staff of over 300 workers.

According to part of a rule of qualification for the PPP, any business that has over one physical location and employs less than 500 per location may qualify for the loan.

Hence, the Lakers successfully became eligible for a loan. 

How people took advantage of this opportunity

However, the Lakers are not the only major brand to apply for this loan. Apparently, Ruth’s Hospitality Group, owner of Ruth’s Chris Steak House, took a $20 million PPP loan.

Further, AutoNation took a $77 million loan. Both companies have announced they would return the money. 

Over 200 publicly traded companies have applied for Paycheck Protection Program loans. Hence, the authorities set a rule. It clarified that any business applying for a PPP loan had to attest “in good faith that their PPP loan request is necessary” .

The rule requires the candidates to make sure that their company also lack any other access to money to help them weather this tough period.