DMC Global returns $6.7 million PPP loan

BROOMFIELD — DMC Global Inc. (Nasdaq: BOOM) is returning $6.7 million from a federal loan program meant for propping up small businesses hit by the economic crisis caused by the coronavirus.

In a statement, the company said it had planned to use the funds to support 306 employee salaries and benefits as the energy sector enters a period of deep financial woes.

New guidance from the Treasury Department released Thursday specifically suggests that public companies with access to non-governmental forms of capital are unlikely to qualify for a PPP loan, and gives two working weeks for companies that did receive loans to pay them back at no penalty.

“In view of these new guidelines and to avoid any further disputes at a time when the business environment is the most difficult it has seen, the company has repaid the loan,” DMC said.

Multiple stories have emerged of large, publicly traded companies receiving PPP loans despite having far more access to capital than smaller businesses. These companies include Shake Shack Inc. (NYSE: SHAK), which received $10 million and has a market capitalization of $1.83 billion.

Shake Shack gave back its loan after public outcry, while President Donald Trump and Treasury Secretary Steven Mnuchin chided large public companies for applying for the funds.

When asked by BizWest this week, DMC claimed it applied for the money because it believed that any requirements the funds be dispersed to small companies without access to capital “wasn’t necessarily conveyed” by federal guidelines. It maintained in its statement Thursday that it was fully compliant with the PPP legislation.

© 2020 BizWest Media LLC

on Facebook on LinkedIn