Treasury Secretary Steven Mnuchin rebuked companies that inappropriately tap coronavirus hardship funds intended for small businesses and warned that they could face criminal liability if the money isn’t returned.
Saying that the approximately $660 billion Paycheck Protection Program wasn’t meant to be “social welfare for big business,” Mr. Mnuchin took aim at the Los Angeles Lakers for applying for funds, which the basketball team later returned amid a public uproar.
At least 13 of the public companies that received loans intended for small businesses said they would return the money, including AutoNation Inc., the nation’s largest car-dealership chain, Ruth’s Hospitality Group Inc. and Shake Shack Inc.
A centerpiece of the government’s effort to combat Covid-19’s economic impact, the PPP offers forgivable loans to companies with fewer than 500 employees that either rehire workers or keep them on payroll during the initial phase of the pandemic. Approval rests on a certification by borrowers that they meet the program’s criteria, a feature that is intended to spare banks from conducting time-consuming due diligence.
“It’s the borrowers who have criminal liability if they made this certification and it’s not true,” Mr. Mnuchin said, noting that companies with access to other sources of liquidity aren’t eligible for the PPP. – READ MORE
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