New guidance on SBA loans means most startups are still excluded from $349 billion stimulus – By Jonathan Shieber (TechCrunch) / April 4 2020
Under new guidance issued by the Small Business Administration it seems non-profits and faith-based groups can apply for the Paycheck Protection Program loans designed to keep small business afloat during the COVID-19 epidemic, but most venture-backed companies are still not covered.
Late Friday night, the Treasury Department updated its rules regarding the “affiliation” of private entities to include religious organizations but keep in place the same rules that would deny most startups from receiving loans.
(a) If you are a restaurant or hotel, a franchisee, or an SBIC-backed company, *no affiliation rules apply to you,* because Congress said so.
It doesn't matter if your parent company has a zillion employees; as long as your entity has <500 employees, you can get a #PPPloan.
— Doug Rand (@doug_rand) April 4, 2020
The NVCA and other organizations had pushed Treasury Secretary Steve Mnuchin to clarify the rules regarding startups and their potential eligibility for loans last week. And House Republican leader Kevin McCarthy even told Axios that startups would be covered under the revised regulations.
Apparently that didn’t happen, as Mark Suster, the managing partner of Los Angeles-based Upfront Ventures, noted in a tweet.
Continue to article: https://techcrunch.com/2020/04/04/new-guidance-on-sba-loans-means-most-startups-are-still-excluded-from-349-billion-stimulus/
