The feds plan to audit all large coronavirus relief loans amid an outcry over big companies getting help at the expense of struggling small businesses.
The US Small Business Administration will review all Paycheck Protection Program loans worth more than $2 million before forgiving the debt, Treasury Secretary Steven Mnuchin said Tuesday. Loans from the $659 billion program can be forgiven if the recipients don’t lay off workers.
“We will make sure that what was the intent for taxpayers is fulfilled here,” Mnuchin said in a CNBC interview. “The purpose of this program was not social welfare for big business. The purpose of this program was to help small business.”
The move marks the Trump administration’s latest effort to crack down on big companies, including the Los Angeles Lakers, that took advantage of the so-called PPP loans that aimed to help small firms keep their workers on the payroll during the coronavirus crisis.
Mnuchin on Tuesday took aim at the LA-based National Basketball Association team known for throwing money at star players like Magic Johnson, Kobe Bryant and LeBron James.
“I’m a big fan of the team, but I’m not a big fan of the fact that they took a $4.6 million loan,” Mnuchin told CNBC. “I think that’s outrageous, and I’m glad they’ve returned it, or they would have had liability.”
Some 248 publicly traded companies have received taxpayer-funded loans valued at $905 million, according to Washington-based data analytics firm FactSquared.
While several big companies such as Shake Shack and Nathan’s Famous have pledged to return their loans, Mnuchin indicated those that keep them could face “criminal liability” for falsely claiming they needed the money.
The Treasury urged public companies to repay their loans last week in new guidance saying those with “substantial market value” would be unlikely to qualify for the program.
“The certification was very clear in saying that if people had other sources of liquidity, they could not take this loan,” Mnuchin said.