An international modeling agency run by Dallas investor Mark Schwarz has received nearly $2 million in low-interest loans under the program designed to keep small businesses afloat during the COVID-19 pandemic .
Wilhelmina International Inc., headquartered at Schwarz’s Crescent Court office, disclosed Zions Bancorporation loans totaling $1,975,200 in regulatory filings this week. The agency has a roster of 2,100 famous models and clients such as pop star Shawn Mendes and rappers Swae Lee and Machine Gun Kelly.
The average Paycheck Protection Program loan was $206,000, according to data from the Small Business Administration and the US Treasury Department. The $349 billion program ran out of money last week after a flood of applications. Congress is expected to approve an additional $310 billion for the program on Thursday.
Founded in 1967 by model Wilhelmina Cooper, the agency is one of dozens of publicly traded companies that took out loans before the program closed. Many small business owners have since complained that they have been left out of the lending effort to help them survive the pandemic.
Wilhelmina’s revenue topped $75.5 million last year and its 114 employees are spread across offices in New York, Miami, Chicago, Los Angeles and London. It has two employees in Dallas.
Schwarz, whose investment companies own 47% of Wilhelmina’s shares, is the company’s executive chairman and serves as its interim chief executive following the January departure of CEO William Wackermann. Schwarz has been involved with the company since 2004 and served as its CEO from 2007 to 2012.
Wilhelmina’s annual report says the global pandemic has reduced client bookings, disrupted its fashion supply chain and hampered models’ ability to travel to photo shoots. He expressed uncertainty about how quickly he can recover.
“The company’s revenues are highly dependent on the level of economic activity in the US and UK, particularly in the fashion, advertising and publishing sectors, all of which have been negatively impacted by the pandemic and may not recover as quickly as other sectors of the economy,” according to the annual report.
In a separate filing on Thursday, Houston-based cafeteria chain Luby’s said it received a $10 million loan under the program from Texas Capital Bank. The company halted on-site dining at most of its cafeteria-style restaurants and Fuddruckers franchises in mid-March, laid off half of its staff and cut pay by 50% for the remaining employees. He also shut down his Cheeseburger in Paradise site.
The SBA issued a notice on Thursday that implies publicly traded companies may have to return the money by May 7 if they cannot prove they were eligible for a loan. The new guidelines require businesses to certify to their lender that they need the loan and cannot access the money from other sources.
Given that public companies have access to capital markets, the SBA says it is unlikely that they “will be able to make the required certification in good faith.”
The program’s original rules allowed large businesses such as restaurants and hotels with fewer than 500 employees per location to apply for loans. The program has approved over 1.7 million loans.
The Associated Press contributed to this story.