Updated; 17.22 BST, April 22. Quantum statements added. NAICS classification corrected.
Quantum, the veteran data storage vendor, has received a $10m loan from the US PPP fund, which is designed to help small businesses weather the Covid-19 pandemic.
According to an SEC filing dated 16 April, Quantum has received a $10m loan – the maximum allowable under the US Paycheck Protection Program (PPP).
A PPP fact sheet says the loans are intended for small businesses and sole proprietorships. Quantum reported $402.7m in revenues in its fiscal 2019 – which is not exactly small.
The PPP loan is ‘forgivable’ – in other words, it is written off if the business uses the money to “cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made [and] Employee and compensation levels are maintained”.
Payroll costs are capped at $100,000 per year per employee and loan payments are deferred for six months.
Although the loans are intended primarily for small businesses and sole proprietorships, all businesses “including nonprofits, veterans organisations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply.”
Quantum’s 2019 annual report states: “We had approximately 800 employees worldwide as of March 31, 2019.”
The PPP fact sheet states: “Businesses in certain industries can have more than 500 employees if they meet applicable SBA (Small Business Administration) employee-based size standards for those industries.”
Update. A Quantum spokesperson said: “The SBA ( US Small Business Administration website ) sets its size standards for qualification based on the North American Industry Classification System (NAICS) industry code, and the size standards for the Computer Storage Device Manufacturing Industry (NAICS code 334112) is 1,250 employees.
“Quantum qualifies for the PPP which allows businesses in the Computer Storage Device Manufacturing industry with fewer than 1,250 employees to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the business disruptions caused by the COVID-19 pandemic. Quantum employs 550 in the U.S. and 800 worldwide.”
SBA affiliation standards are waived for small businesses (1) in the hotel and food services industries; or (2) that are franchises in the SBA’s Franchise Directory; or (3) that receive financial assistance from small business investment companies licensed by the SBA.
The spokesperson added: “The PPP loan is saving jobs at Quantum — without it we would most certainly be forced to reduce headcount. We owe it to our employees – who’ve stuck with us through a long and difficult turnaround – to do everything we can to save their jobs during this crisis.”