Treasury Secretary Steven Mnuchin on Wednesday warned companies that were granted relief from the small-business provisions in the CARES Act to give the money back if they don’t qualify for the loans.
“There is a certification that these companies need to make, and I think they need to look at it very carefully,” he told Fox Business’s Varney & Co. “A lot of these big companies are questioning whether they can make that certification. I think they should review it. If they pay the money back quickly, there will be no liability to Treasury or the SBA. If they don’t, they could be subject to investigation.”
The Payroll Protection Program, which is a part of the CARES Act, provides loans to cover the payrolls of small businesses with 500 or fewer employees. When applying for the loan, business owners must certify the number of workers they have on their payrolls.
Large companies, such as Shake Shack, which employs over 8,000 workers, roughly 45 worker per restaurant, applied but ultimately did not accept a $10 million loan from the government through the program.
The New York-based burger chain is one of many companies bringing in hundreds of millions of dollars annually that received financial assistance from the $349 billion Paycheck Protection Program.
Mnuchin said that over 1 million small businesses have been approved for loans from the CARES Act.
“It’s been approved, so, in many cases, the money is out the door. In some cases, the banks are still in the process of sending that out. But that’s a million small businesses. … Thirty million workers impacted so far, and we expect it will be another 30 million workers by the time we get done with this,” he said.
Nearly 80% of small-business owners surveyed on April 17 who applied for the federal loan program did not know where they were in the application process, forcing some of them to furlough workers.
“They have no idea if they’re getting the loan,” said Holly Wade, director of research and policy analysis at the National Federation of Independent Business, which conducted the survey.
The funding for the federal government’s small-business relief program ran out on April 16, leaving hundreds of thousands of businesses without a lifeline as they try to survive the pandemic.
The Senate passed a new small-business and hospital aid package on Tuesday worth more than $480 billion that is aimed at addressing the impact of the coronavirus outbreak.
The measure passed after an hour of debate and a voice vote, which does not require lawmakers to take a roll-call vote. The measure now heads to the House on Thursday, where it is likely to pass.
