Three weeks and hundreds of billions in misappropriated loans later, the Treasury Department has issued guidance intended to stop banks from issuing Paycheck Protection Program loans to large companies.
According to CNBC, the Treasury says it's unlikely that any public company with substantial market value and access to capital markets will be able to credibly prove in good faith that they have a legitimate need for a PPP loan.
In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application.
Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary.
CNBC. The guidance comes after national outrage over banks such as JPMorgan prioritizing loans to large, public companies over small businesses struggling during the COVID-19 pandemic, which the funds were intended for in the first place.
The minimal requirements for loan qualification, designed to speed relief, have allowed employers to obtain PPP loans even if they aren't in financial distress and have no need or intention to lay workers off.
Johnson proposes adding forgiveness limitations to PPP funds based on ability to repay, which would apply to all loans - including those granted under the Cares Act.
https://www.zerohedge.com/economics/treasury-posts-guidance-stop-ppp-loans-going-large-companies-after-small-business-owners
According to CNBC, the Treasury says it's unlikely that any public company with substantial market value and access to capital markets will be able to credibly prove in good faith that they have a legitimate need for a PPP loan.
In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application.
Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary.
CNBC. The guidance comes after national outrage over banks such as JPMorgan prioritizing loans to large, public companies over small businesses struggling during the COVID-19 pandemic, which the funds were intended for in the first place.
The minimal requirements for loan qualification, designed to speed relief, have allowed employers to obtain PPP loans even if they aren't in financial distress and have no need or intention to lay workers off.
Johnson proposes adding forgiveness limitations to PPP funds based on ability to repay, which would apply to all loans - including those granted under the Cares Act.
https://www.zerohedge.com/economics/treasury-posts-guidance-stop-ppp-loans-going-large-companies-after-small-business-owners
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