As deadline looms, companies rush to return small business funds – By Zachary Warmbrodt (Politico) / May 17 2020
The attempt to discourage businesses from seeking the loans if they have access to other funding sources has angered some lawmakers.
Public outrage and Trump administration pressure have forced dozens of companies to return government-backed small business loans, sweeping up not only major brands like Shake Shack and Potbelly but also smaller employers that don’t want to face scrutiny.
The companies are scrambling to give back the Paycheck Protection Program loans before a Monday deadline the administration set for borrowers to return the aid if there’s any doubt they need the money, or else face audits. Hundreds of millions of dollars have been returned by companies that file with the Securities and Exchange Commission. In the past week, organizations including the Aspen Institute think tank, biotech firm 22nd Century Group, mattress fabric manufacturer Culp and medical device company CHF Solutions announced they were relinquishing funds.
The loans, which Congress created to help avert massive layoffs during the Covid-19 pandemic, have proven hugely popular because they can be forgiven if borrowers maintain their payrolls. But the Trump administration has so far declined to name the recipients, fueling concern over whether too much of the aid is going to big companies with access to other forms of financing.
The Small Business Administration and the Treasury Department, which are running the program, last month began urging large, publicly traded companies to return any loans after a backlash over revelations that Wall Street-backed corporations were benefiting. Though the loans were targeted at employers with 500 workers or fewer, Congress included exemptions that allowed bigger companies to seek the aid.
Continue to article: https://www.politico.com/news/2020/05/17/companies-return-small-business-funds-261430
