Laid-off employees and workers with Unite Here 11 labor union protest outside the closed Four Points by Sheraton LAX hotel in Los Angeles as they call for an investigation by the U.S. Small Business Administration into the hotel’s use of Paycheck Protection Program loan funds in April. The workers allege that the hotel owner, Rui Gao Inc. of San Marino, California, received PPP loans meant to keep workers employed during the Covid-19 pandemic totaling more than $4 million but closed the hotel on Feb. 5, a week after a second PPP load was approved. The most recent round of PPP closed on Monday. Photo by Patrick T. Fallon / AFP

THE APPLICATION PERIOD for the latest round of the Paycheck Protection Program has come to an end. This latest round of the COVID-19 pandemic relief program distributed more than $798 billion to small businesses, including hotels, to help them retain employees, according to the U.S. Small Business Administration.

More than 8.5 million small businesses and nonprofits have received  PPP loans, said Isabella Casillas Guzman, SBA administrator, in a statement. Guzman called the program a lifeline for the recipients to help them survive the economic downturn brought on by the pandemic.

“I’ve heard story after story from small business owners across the country about how PPP funds helped them keep the lights on, pay their employees and gave them hope,” Guzman said. “At the same time, millions of underserved businesses, particularly our smallest businesses and those owned by women and people of color, were left out of early rounds of relief. In 2021, 96 percent of PPP loans went to small businesses with fewer than 20 employees.  Moving forward, we will continue to prioritize equity in all SBA’s programs and services.”

In March, President Joe Biden signed the PPP extension that added  two months to the most recent round, setting May 31 as the finishing date. According to SBA, 32 percent of the loans went to low and moderate income communities.  Additionally, Community Financial Institutions during this period provided 1.5 million loans totaling $30 billion to underserved communities. Individual PPP loans in 2021 averaged $42,000, indicating very small businesses were taking advantage of the program.

There were some issues with the program. In April, a group of employees at the Four Points by Sheraton LAX near the Los Angeles airport filed a complaint with the SBA saying they had been laid off when the hotel closed one week after receiving $4.4 million in PPP loans, according to Business Wire.com.

“My coworkers and I were surprised to learn that our owner received millions in PPP loans. We did not see how any of that money got used to help us. Where is the money?” Graciela Gomez, a housekeeper at the Four Points for 20 years.

The hotel’s owner, Rui Gao Inc. of San Marino, California, originally received $2.4 million in PPP money in April 2020 that the SBA may have already “forgiven” this loan, converting it into a taxpayer grant.

“Rui Gao knew what he was doing when he applied for the second round of PPP loans. It is disgusting to see how owners like him are taking money meant for struggling small businesses, while workers who dedicated their lives to them are fighting to survive,” said Kurt Petersen, co-president of labor union UNITE HERE Local 11. “We hope that the SBA in partnership with the Department of Justice will take all appropriate measures to hold Rui Gao and other borrowers accountable for their use of these taxpayer funds.”