While many small businesses have found it difficult or impossible to get one of the Small Business Administration’s Paycheck Protection Program loans, a company owned by a prominent Chicago family with close ties to the Trump Administration was able to get a $5.5 million loan under the program, according to documents the company filed with the Securities and Exchange Commission on Monday.
U.S. Ambassador to Belgium Ronald Gidwitz, whom President Trump appointed in 2018, was then-candidate Donald Trump’s campaign finance chair for Illinois in the 2016 presidential campaign. According to filings with the SEC, Gidwitz’s family owns the majority of Continental Materials Corp., which secured the 1-percent interest loan.
Continental Materials makes heating and cooling equipment and construction products. While it had more than $100 million in sales last year, it qualified for the loan because it meets the Small Business Administration’s industry-specific “small business” size standards, according to company chief financial officer Paul Ainsworth.
Still, the company’s loan is much larger than the typical PPP loan, according to a summary released by the Small Business Administration last week. The average loan was just over $200,000, and fewer than 1 percent of the loans under the program were greater than $5 million.
Ainsworth told NPR the money would be used to pay the company’s 445 employees in the face of slowing demand for its products.
“We had planned to furlough people and we delayed those plans,” he said. “To the extent that we had to let people go, we’re hiring them back.”
While the company may qualify as a small business under the PPP program, there are many much smaller businesses that have been unsuccessful in obtaining or even applying for the loans from their banks.
The business advocacy group NFIB surveyed a random sample of the 300,000 businesses in its membership database, and found that only about 72 percent of businesses that tried to apply for a PPP loan were able to successfully submit an application.
Continental Materials will be able to pay back the loan over two years and may qualify for it to be forgiven.
When asked, Ainsworth said the loan is not related to any political activities of company leaders, and he noted Ronald Gidwitz’ resignation upon his appointment as ambassador.
Gidwitz was confirmed to the ambassadorship by the Senate by voice vote in June 2018. He announced his resignation from the company’s board a few days later in July, according to company SEC filings.
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