WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin warned on Wednesday that larger companies could face investigation if they apply for small business coronavirus rescue money without carefully reviewing whether they qualify for it.
Mnuchin said on Fox Business Network it was “questionable” whether some larger companies could make the certifications necessary for the Paycheck Protection Program, and firms needed to look carefully at the certifications they make to the Treasury and the Small Business Administration to get forgivable loans of up to $10 million.
The U.S. House of Representatives is set to vote on a new rescue bill that provides another $321 billion to the program aimed at keeping employees at temporarily closed businesses on the payroll after an initial $350 billion ran out in less than two weeks.
Some of the larger recipients included sandwich chain Potbelly Corp (PBPB.O) and steakhouse chain Ruth Hospitality Group (RUTH.O), prompting complaints that smaller, independent restaurants and “mom and pop” businesses were squeezed out.
Burger chain Shake Shack (SHAK.N) returned its $10 million loan on Monday after it was able to raise $150 million in capital in a stock offering.
In the SBA application form, companies need to certify that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.”
“I think a lot of these big companies, it’s questionable whether they can make that certification, I think they should review it,” Mnuchin told Fox Business Network.
If companies apply and later decide that they cannot make certifications that the money is necessary and “pay back the money quickly, there will be no liability to Treasury and the SBA,” Mnuchin said. “If they don’t, then they could be subject to investigation.”
With the additional funding, which also includes $60 billion for an emergency disaster loan program for small businesses, Mnuchin said government aid would ultimately help some 60 million American workers, or close to half of U.S private sector payrolls.
Mnuchin said he believed most, if not all, of the U.S. economy should be reopened by later in the summer after a devastating shutdown to try to stem the spread of the novel coronavirus.
“We’re looking forward to by the time we get to later in the summer, having most of the economy if not all of the economy open,” Mnuchin said.