Lloyd Blankfein says big business should be “very reluctant” to tap into small business funds
Lloyd Blankfein, the EX-Goldman Sachs The CEO whose bank accepted bailout funds during the financial crisis said large companies should be “very reluctant” to take taxpayer money amid the coronavirus pandemic.
“Big business should be very reluctant to accept government money,” Blankfein said Thursday on CNBC’s “Scream Box“in response to a question about how the public will perceive businesses that accept money from the Federal Small Business Assistance Program.
“I think over time the goals will change” from a sense of urgency in disbursing funds to a closer look at companies that shouldn’t have kept them, Blankfein said. “It’s kind of a natural phenomenon, I don’t think it’s bad behavior on the part of the government.”
Public enterprises including Shake Shack and AutoNation have been criticized after participating in the federal paycheck protection program, although these are large companies with access to other forms of capital.
The two companies are among more than 40 companies that have said they return funds so that small businesses have a better chance of getting loans. The first round of PPP went swiftly and hundreds of thousands of small businesses were left in limbo while larger companies were more successful in leveraging the program.
Companies that should not have applied for PPP loans have until May 14 to return the funds.
“There will be resentments that emerge because some people get help and others in a similar situation won’t,” Blankfein said in the wide-ranging interview. “If you need it, take it, but you really shouldn’t need it,” he added.
Blankfein may be speaking from experience: Goldman withdrew $ 10 billion from the distressed assets relief program from the Treasury at the height of the financial crisis in October 2008. Although he paid the funds back in less than two years , the move fueled public anger that financial companies had to be rescued after the industry helped spark the subprime mortgage crisis.