Exempt Country Club Receives PPP Loan

Country clubs were exempt from receiving PPP loans, yet Strathmore-Vanderbilt Country Club still received one. (Photo by Alex Nunez)

Strathmore-Vanderbilt Country Club of Manhasset is registered as a 501(c)(7) nonprofit, which according to the CARES Act and confirmed by the Small Business Administration (SBA) are not permitted to receive a Paycheck Protection Program (PPP) loan. However, the country club did in fact receive a PPP loan of $385,348 despite this exemption.

“Tax exempt 501(c)(7) organizations were not included in the SBA Paycheck Protection Program through the CARES Act and are not eligible recipients,” SBA Regional Communication Director Matthew Coleman told the Manhasset Press. “PPP loans were not made or approved by the SBA; they were approved by lenders with delegated authority and guaranteed by the federal government through our agency. That is the very essence of the PPP’s delegated authority process contained in the CARES Act.”

Strathmore-Vanderbilt Country Club applied for the PPP loan through the Bank of America, which has the right to approve or deny the loan based off guidelines from the SBA. A Bank of America’s spokesperson said they would not comment as to why the bank approved a loan from a 501(c)(7).

PPP was designed to keep workers on payroll in case of lockdowns by the state or local authorities during the COVID-19 pandemic. The funding helped many small businesses survive the first wave of the pandemic in the spring. However, a country club makes most of its revenue from membership dues.

Strathmore Vanderbilt Country Club was asked repeatedly for comment on this story by phone and email, but no response was given. It’s unknown how many employees the country club had before and after receiving the loan or what the money was used for.

“Federal authorities treat reports of alleged misconduct, wrongdoing or borrower ineligibility in federal programs very seriously,” Coleman said.

The SBA and Treasury Department have said loans that exceed $2 million will be reviewed, but Strathmore-Vanderbilt Country Club does not fall within that category. Businesses that received PPP loans are currently applying for loan forgiveness, the country club’s loan could be not forgiven and the country club would have to pay back the loan with interest. U.S. District Attorneys across the country have also filed criminal indictments for false information on PPP application forms.


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