As of August 2020, Kanye West’s net worth is just over $1 billion. Since creating his brand Yeezy in 2009, West’s net worth has skyrocketed. On top of that, West makes millions of dollars off of various investments, and from his music. His music, fame, business ventures, and combined assets with Kim Kardashian West have truly placed him in the top echelons of the American elite. Yeezy really can’t be compared with small businesses like local bars or landscaping companies. But according to reports from the Small Business Association, Yeezy received a PPP loan of at least $2 million. How did such a large company end up with money intended for small businesses?
For a long time, Kanye West has had ambitions of becoming a fashion designer. The first Yeezy sneakers were released in a partnership with Nike in 2009; West started collaborating with Adidas in 2013 and has maintained that partnership since. Kanye West’s fame, the design of the shoes, and his limited releases of new designs have made Yeezys a massive success. Kanye West knows how to appeal to streetwear and sneakerhead cultures, and new Yeezy releases tend to sell out incredibly quickly. Regardless of your opinions of Kanye West the person, he knows how to draw popular attention.
What are PPP loans?
PPP stands for “Paycheck Protection Program,” and according to the Small Business Association’s website it is “designed to provide a direct incentive for small businesses to keep their workers on the payroll.” It’s a two-year loan with 1% interest, and payments are deferred for six months to make it easier for businesses to make payments. The maximum amount a business can receive is 125% of payroll costs or $10 million. A certain amount of the loan has to be used for payroll, and the Small Business Association expects that business owners use the remainder for business costs like rent and utilities. If businesses keep employees at their pre-pandemic salaries, they can even have the loan forgiven.
How did Kanye West end up with a PPP loan?
After various groups requested more transparency from the Small Business Association, the Treasury Department listed the companies that received a loan larger than $150,000. With these releases, the public was able to learn about the larger companies that received PPP loans. Among these businesses was Yeezy LLC, according to NBC News.
Although it may be problematic that such a large company would receive a loan while small businesses are struggling, this loan in theory didn’t go to West’s personal funds. According to the data released by the Treasury Department, this loan did help 106 employees keep their jobs. However, it’s understandable that people may still be angry about this. In April, when the Small Business Association gave out their first round of loans, they very quickly ran out of funding.
Legally, however, Yeezy LLC may be a small business. The legal definition of a small business in the United States depends on many factors. A company’s revenue and number of employees together determine if a business is a small business or not. The businesses that receive PPP loans have to employ less than 500 people, so despite the size and wealth of Yeezy and Kanye West, legally speaking, Yeezy LLC is a small business, according to Smart Asset.
While Yeezy LLC may be legally entitled to a PPP loan, the high amounts of money given to some businesses are nevertheless controversial. Beyond Kanye West being a billionaire and not the owner of a mom-and-pop business, West’s connections to President Donald Trump have caused people to be extra suspicious of Yeezy’s large loan. That being said, the loan may have saved several employees’ jobs, making this issue more complex than it may seem at a glance.
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