According to a new report from the consumer watchdog group Texas Appleseed, companies that sell Texans short-term loans with huge fees borrowed more than $45 million in federal pandemic business loans through the Paycheck Protection Program (PPP) and the Main Street Lending Program.
“The CARES Act was not adopted to subsidize predatory lending businesses. It was adopted to help families and small businesses weather this incredible financial crisis,” say Texas Appleseed’s Ann Baddou.
The company LoanMe received more than $4.8 million in PPP loans, according to the Texas Appleseed report. If the loans to LoanMe aren’t forgiven entirely, the company will pay an interest rate of 1%.
If a borrower in Texas takes out a $600 multi-payment payday loan from the company LoanMe, they’ll pay nearly $1,000 in fees and interest. That means it takes $1,600 to pay back a $600 loan, working out to an APRof 510%.
Read Texas Appleseed’s report below: