- Treasury Secretary Steven Mnuchin said Tuesday that loans over $2 million will undergo a "full review" before they're forgiven.
- At least 220 publicly traded companies took loans from the program. 15 have said they will return the money.
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The US government will do a 'full review' of any company taking a small business loan over $2 million after massive corporations took advantage of the program
As $310 billion in new funding replenishes the Paycheck Protection Program, small businesses can expect more oversight.
Treasury Secretary Steven Mnuchin said Tuesday that the government will be conducting a full review of any Paycheck Protection Loan over $2 million after large corporations abused the relief program meant for small businesses.
"It is unfortunate that a small number of companies that have created a lot of publicity that took loans," Mnuchin said on CNBC of the 220 publicly listed firms that received Small Business Administration assistance e. "I think it was inappropriate for most of these companies to take loans, and we don't think that they ever should have been allowed to."
15 of those companies, including Shake Shack, Ruth's Chris Steakhouse, and the Los Angeles Lakers, which took loans based on the program's language implying they were eligible, said they would repay the loans. Mnuchin called the Los Angeles Lakers loan "outrageous."
Going forward, companies can expect a more thorough review as the $310 billion in fresh funding for the program is doled out.
"I'm gong to be putting out an announcement this morning, that for any loan over $2 million, the SBA will be doing a full review of that loan before there is loan forgiveness," Mnuchin said. "We will make sure that what was the intent for taxpayers is fulfilled here."
The Secretary also deflected blame from big banks which were accused of being selective with which small businesses' applications for the program were successful putting the onus on the applicants.
"The banks were only middle men here, and the banks were not required to do the diligence," he said. "I really fault the borrowers who made these certifications. There were some banks who put things up on their website and prioritized their customers, we immediately told them it was wrong and they took it down. I want to be very clear it's the borrowers who have criminal liability if they made this certification and it's not true."
Despite the hiccups and resulting public outcry Mnuchin said the program has been an "overwhelming success" in aiding small businesses. The average loan size has also fallen to less than $100,000, he said.
"I think it saved a lot of people," Mnuchin said. "It's going to bring a lot of people back."
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