CNBC: Treasury Secretary Steven Mnuchin told CNBC on Tuesday the government will audit any company taking out more than $2 million from the small business loan program.
The government program allows companies to have their loans forgiven, provided they spend the funds on payroll, benefits, rent and utilities. The Paycheck Protection Program faced backlash after several public companies disclosed they had taken out the loans, which were intended to help small businesses with fewer than 500 employees weather the coronavirus crisis.
“I’m going to be putting out an announcement later this morning that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness,” Mnuchin said on “Squawk Box.”
“This was a program designed for small businesses. It was not a program that was designed for public companies that had liquidity.’”
More than 220 public companies applied for at least $870 million from the government program, according to Washington-based data analytics firm FactSquared. Those companies included Auto Nation, Ruth’s Hospitality Group and the Los Angeles Lakers. read more
The scams will be in the below-2mil range, not the above 2-mil.
What a joke. Who set this up, Barr-Sessions?
The small business I’m working at applied several times requesting a figure way under the million mark. Denied every time. I’m the only person working there right now that gets a paycheck. Due to no financial assistance the three bosses and myself are the only ones there where normally at this time of year we would have 10 to 12 people in the store and another dozen or more doing pool openings and getting set up for installs which employs many sub contractors for excavation and cement and electrical work. Right now we’re surviving mostly on the lawn equipment side of the business with some pool chemical sales. It’s rough. The bosses are forgoing most of their salaries to keep the business afloat.
$2Million for 10 weeks payroll = $200,000/week for 500 employees = $400 per employee per week. (Right? Correct my math if not.) So, no problem there. My question is whether a 500 employee firm is a small business. Or if a smaller firm with fewer higher paid owners and employees is. This was presented as a bandage for small hemoraging businesses but I think a lot of the banks gave priority to the businesses they couldn’t afford to have as bankruptcies on their books. Some real Mom & Pop and local small firms didn’t already owe the bank enough to be prioritized. True local businesses need to work with real community banks to matter. Some of our local little restaurants and retailers –who advertise to ‘shop local’– are upset b/c their loan applications were denied or ignored by the big banks. If we come out of this, small local business and small local banks need to support each other better in the future, b/c big business and big government don’t care about either of us.
They’ve forced businesses to incur needless debt and servitude to the fed through all of this. Frigging unseemly to say the least.