The federal government's Paycheck Protection Program (PPP) was designed to help businesses cover payrolls, avoid layoffs and stay open during the pandemic.
But some Metro Detroit buinesses got the loans, then folded shortly after, JC Reindl of the Detroit Free Press reports. Some loans in the program can be fully forgiven, while others must be repaid to the government with 1-percent interest.
Andiamo restaurant on Michigan Avenue in Dearborn was approved for a $434,749 loan Jan. 23, the paper says. It closed at the end of February, citing financial strains from the pandemic.
It's unclear if they willl have to repay the loan. The restaurant did not return a call from the Freep for comment.
Another business, Magnet Restaurant on Grand River and 16th Street in Detroit, which opened in September 2019, was approved for a $280,274 PPP loan in late April 2020 to support 32 employees. Four months later, the business folded.
Philip Kafka, a business partner in the restaurant, told the paper the loan was to help the restaurant get through some lean months, but the pandemic didn't go away. He said they have yet to apply for loan forgiveness, so he's uncertain what will happen.