Hurting long before COVID-19, failing companies took stimulus money then closed anyway

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Hurting long before COVID-19, failing companies took stimulus money then closed anyway

Stein Mart Inc. was desperate for shoppers long before COVID-19 forced closures at its discount department stores, scattered mostly throughout the

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Stein Mart Inc. was desperate for shoppers long before COVID-19 forced closures at its discount department stores, scattered mostly throughout the Southeast. 

During the past several years, the Florida retailer had hemorrhaged tens of millions of dollars, while searching for a corporate buyer. Like many struggling businesses, the company in June turned to the federal government’s Paycheck Protection Program as a possible savior. The $10 million loan didn’t last long. 

Within two months, Stein Mart filed for Chapter 11 bankruptcy protection, citing more than $500 million in liabilities. The company closed all 280 stores and 9,000 workers lost their jobs. 

A shopper passes a Stein Mart store that closed recently at Ellisburg Shopping Center in Cherry Hill.

Nothing prevented Stein Mart from taking the PPP handout on its way under.

Lenders participating in the Small Business Administration relief program shelled out more than $520 billion last year to millions of companies searching for a lifeline to stave off the economic impacts of COVID-19. Like Stein Mart, USA TODAY found that some were failing long before the pandemic hit.

They came from sinking industries like taxi cab services, newspaper printing and mining. Many were already trimming staff, flirting with bankruptcy and planning for possible closure.

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