Silicon Valley tech companies took many millions in government bailout money this year via a program intended to allow employers to retain their employees during the pandemic.
According to newly released Small Business Administration data, 885 Silicon Valley tech companies borrowed a total of $381.3 million via the Paycheck Protection Program. That figure excludes telecommunications companies and does not account for businesses based in San Francisco.
The vast majority of these tech companies aren’t exactly well known, with a couple of notable exceptions.
San Mateo-based smart location device company Tile borrowed $2.5 million through Central Pacific Bank on April 15. The company’s website says it’s now hiring. Tile’s investors include Bessemer Venture Partners, GGV Capital, Tencent, and Khosla Ventures.
Redwood City-based Reputation.com, a reputation-management company, borrowed $6.04 million through Silicon Valley Bank on April 15. The company lists numerous openings on its job opportunities page. The company’s investors include Ascension Ventures and Kleiner Perkins.
For Silicon Valley tech companies, the average PPP loan disbursement was $430,844 (the national average for all business types was $101,409). The biggest loan was $9.04 million to Santa Clara-based networking company Silver Peak Systems, before it was acquired by HP Enterprise in September. The smallest, $500, went to Fremont-based Indian content destination namasteandhra.com.
The PPP forgivable loan program was launched by the SBA in early April and lent out all of its $349 billion in about two weeks. A new government bill provided the program with $310 billion in additional funds in late April.
Many venture-backed tech companies agonized over whether to take the PPP loans when businesses in other industries were arguably more needy.
The Paycheck Protection Program was meant to provide emergency relief to small and medium-size businesses. The low-interest loans of up to $10 million are forgivable if the recipient laid off no employees for eight weeks after getting the funds. But the SBA left it up to applicants to determine whether they could borrow the money “in good faith.”