David Lerner Associates landed a $4 million PPP loan in 2020

Meanwhile, the Long Island, New York-based firm also reported that its financial condition continued to decline.

David Lerner Associates Inc., once known for its New York-area radio ads selling municipal bonds, reported in a recent filing with the Securities and Exchange Commission that it received a Paycheck Protection Program loan of $4 million in April 2020.

That appears to be on the higher end of PPP loans received by privately held broker-dealers who obtained Covid-19 business relief. Last summer, InvestmentNews tracked seven broker-dealers that received anywhere from $150,000 to $2 million from the program; loans were to be used to protect employees’ salaries during the pandemic.

But one large firm, National Securities Corp., with more than 700 independent reps, reported at the end of last year receiving a PPP loan of $5.5 million.

For the PPP loans to be forgiven by the federal government, the proceeds of the loans needed to be spent on employees’ salaries, health care costs and other expenses. The loan program was aimed at buoying businesses with less than 500 employees.

Meanwhile, the Long Island, New York-based firm also reported that its financial condition continued to decline.

In its 2020 audited financial statement, known as a Focus report, David Lerner Associates stated a “negative net worth,” meaning its liabilities are greater than assets, of $26 million at the end of December, an increase of $4 million, or 18%, compared to a year earlier.

The Focus report was filed with the SEC in March but did not appear on the commission’s website until recently.

The firm recently received an unqualified or clean report from its accounting firm for last year, and the deficit indicated in the financials is offset by subordinated loans that qualify as regulatory capital, the company noted in a statement to InvestmentNews.

“Like many other businesses in the United States, and in accordance with the Government’s requirements, David Lerner Associates obtained a PPP Loan in 2020,” the company said in the statement. “The firm’s ownership is committed to maintaining the financial viability of the firm. We are optimistic about the company’s future.”

David Lerner Associates was once well known in the New York area for radio ads that practically blanketed the airwaves and asked prospective investors to “Take a tip from Poppy,” referring to its owner, David Lerner, who promoted municipal bonds.

The firm has five branch offices in the northeast and Florida, according to its website.