Nikola received a $4.1 million loan from the Paycheck Protection Program (PPP) of the Small Business Administration to help small companies keep people working during the COVID-19 pandemic, according to the Securities and Exchange Commission report on April 15. After Faraday Future (who got a $9.1 million loan), and Workhorse (who got a $1.1 million loan), it is at least the third EV company to raise funding from the PPP.
The loan, which can be repaid as long as Nikola is holding on to most of its staff, comes just over a month after the company earned an investment of $525 million and became a publicly traded firm. That move made, according to CNBC, which first published the loan's news, gave founder Trevor Milton a net worth of more than $1 billion.
Since Milton founded the company in 2015, Nikola has been designing big hydrogen and battery-powered vehicles, and last year it struck a deal with European manufacturer Iveco to mass-produce one of those trucks. But the Arizona startup is also remembered for the $2 billion lawsuit it brought against Tesla in 2018, arguing that Nikola's design patents were in violation of the electric big rig being built by Elon Musk's firm.
The case has dragged on for almost two years, but Milton tweeted on April 20 that the Tesla lost an offer with the US Patent and Trademark Office to invalidate some of the patents. “Two billion dollar lawsuit moving forward. We will defend our company’s IP no matter who it is,” he wrote.
Milton tweeted on Wednesday that the PPP loan would help Nikola's more than 300 workers cover their expenses for around two months. He also took issue with CNBC's coverage of its net worth (saying it's caught up in stock that he can't sell) and his recent $32 million ranch purchase.
“Yes I was the buyer [of the ranch], but I owe a full mortgage. 28+ million. If our company doesn’t succeed I lose everything in life like so many others,” he wrote. “I’ve given so much to so many people and get hammered for it just because I built a great company that could use the PPP help.”
Banks have already lent the full $350 billion that the Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated to the PPP, while Congress is expected to approve another $300 billion infusion later this week. The rollout of the system was chaotic, and many small companies around the country were unable to receive the loans they needed, despite the banks that gave them to big business like Shake Shack. (Shake Shack eventually said that the $10 million loan it got will be returned.)
"It is likely that Congress would have to go back a third time, given the best estimates suggest this is a $1 trillion problem," Joseph Parilla, a fellow at the Metropolitan Policy Program at the Brookings Institution, told Vice.