The billionaire founder of Nikola Motor Co., which received $4 million in Paycheck Protection Program funds, said he doesn’t plan to give the money back and didn’t prevent small-businesses from getting loans.
Trevor Milton, the founder and CEO of Nikola, which makes hydrogen-fuel-cell trucks, said that because the company is in the middle of a merger, it can’t access money from private or public markets. Milton said the company needed the PPP funding, meant to aid small businesses affected by the coronavirus outbreak, to keep its more than 350 employees.
The deal, announced last month, effectively takes Nikola public through a merger with VectoIQ and valued the merged company at over $3.3 billion. As part of the deal, Nikola is also getting more than $500 million in cash from outside investors.
On CNBC last month, one of Nikola’s main investors, ValueAct, said the company would one day be worth $100 billion, and Milton said he had recently secured an $800 million order for its trucks from Anheuser-Busch.
But Milton said the company needed the government’s PPP funds given the uncertain timing of the deal.
“This is exactly what PPP was created for,” he said. “We’re a small business, we’re one-fifth the size of what the SBA considers a small business.”
Over 180 public companies have received over $670 million PPP funds, which were originally intended to help small businesses retain or hire back employees hurt by the coronavirus. Because the program quickly ran out of funds, many small businesses never got funding or even had their applications completed. Congress and the White House authorized another $310 billion in funding for a second round of PPP funding.
Yet the backlash caused the Treasury department to issue new guidelines effectively preventing public companies from receiving PPP funds. It said companies have to prove the funds were a “necessity” and that the companies can’t tap any other sources of funding. The Treasury Department said companies that didn’t fit the criteria had until May 7 to return the money.
MIlton said that even though the company had received “all this hate” since CNBC reported on its PPP funding, Nikola did not prevent small businesses from getting the limited funds.
“I didn’t deny their loans,” he said. “We didn’t prevent those small companies from getting their money. We applied what the government said were specific requirements. And we fit every one of those.”
Milton’s ownership stake in the company, of more than a third, makes him a billionaire on paper. Last year he bought a $32.5 million luxury ranch in Utah. Milton said his fortune is “just on paper” and “I don’t even think I could afford to cover the PPP if I wanted to.”
Milton said he bought the ranch with a $28 million mortgage so he can’t sell it or use it to access capital.
As for the mom-and-pop businesses that might be upset that a billionaire got the money instead, the 38-year-old Milton said he has launched five companies, two of which failed.
“I sold everything I had and I lost everything twice,” he said, “My house, my car, I even sold all my guns, everything. No one knows what it’s like going through what those people are going through more than me. Nobody has gone through five companies at my age and lost two. I would never take this money if I did not think it was for the right situation.”